Maurice Blackburn have launched a class action against Commonwealth Bank (ASX: CBA) on behalf of Colonial First State account holders.
The class action is in relation to alleged breaches of super trustee duties that Maurice Blackburn says have caused substantial losses to more than 100,000 members over several years.
The firm alleges contraventions of superannuation law in Colonial's slow implementation of the MySuper reforms for members of the FirstChoice Employer Super division.
Specifically, Maurice Blackburn alleges Colonial breached its duties to shareholders because it failed to exercise the degree of care, skill and diligence required of a prudent superannuation trustee; perform its duties and exercise its power in the best interest of beneficiaries; and give priority to the interests of beneficiaries where a conflict of interest arose.
The class action has been filed in the Victorian Federal Court against Colonial First State as well as Colonial's former executive director Linda Elkins.
Miranda Nagy, Principal Lawyer at Maurice Blackburn, says the case will centre on Colonial's failure to transition $3.2 billion of accrued default amounts (ADAs) over to the lower-cost, higher-performing MySuper product in a timely way and in the best interests of superannuation fund members.
"The contraventions at the heart of this case resulted in members in FirstChoice Employer Super paying higher fees and receiving a lower investment return for an extended period of time, when they could have been in Colonial's cheaper, better-performing MySuper product earlier," says Nagy.
"The whole point of the MySuper reforms was to make sure that millions of everyday Australians who hadn't made an active decision about their super, were not 'getting charged for valet parking when they were taking the train', as Minister Shorten said at the time."
"MySuper was introduced to protect the retirement outcomes of Australians by ensuring that consumers weren't losing money on unnecessary fees and products, and Colonial had a legal obligation over and above a basic moral obligation to move default member balances into MySuper at the time that best met their members' needs, not their own."
CBA has acknowledged the class action and are reviewing the claim.
Shares in CBA are down 0.79 per cent at 1.10pm AEDT.
Business News Australia