The case will focus on NAB’s alleged failure to transfer A$6.3mn of accrued default amounts to MySuper in a timely fashion, as required by law.
Australian law firm Maurice Blackburn has filed a class-action lawsuit against two NAB (National Australia Bank) superannuation trustees for breaching their duties and failing to act in the best interests of clients.
The two NAB units – MLC Nominees and NULIS Nominees – are said to have left more than 330,000 clients “idling in products” with high fees and commissions to financial advisers, which are outlawed in low-cost default MySuper products.
The case will centre on NAB’s alleged failure to transfer AUD 6.3 billion (USD 4.3 billion) of accrued default amounts to MySuper in a timely fashion, as required by law, says a statement from the Maurice Blackburn.
“Because of the delay, default members with accrued default amounts paid higher fees and commissions and received a lower investment return for an extended period of time.”
Since 1 January 2014, new default contributions are required to be allocated to a MySuper product, and existing accrued default amounts are required to be transitioned by trustees to MySuper.
While the final deadline for the transfer of the default amounts to MySuper was 1 July 2017, the Royal Commissioner Kenneth Hayne had highlighted NAB’s breaches, saying NULIS and MLC Nominees “did not move with all deliberate speed … for fear of how advisers would react to the loss of commissions”.
“This is another regrettable case of mismanagement in the superannuation sector,” said Maurice Blackburn national head of class actions Andrew Watson.
“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 losing money on higher fees and unnecessary or unused services.”
The class action follows the commencement of federal court proceedings in December by ASIC (Australian Securities and Investments Commission) against NAB for charging customers ongoing service fees without providing them ongoing financial advice, allegedly breaking the ASIC Act and Corporations Act on more than 12,000 occasions.
In November, NAB settled a class action for AUD 49.5 million to compensate consumers – mostly students, pensioners and the unemployed – who were sold CCI (consumer credit insurance) products despite being ineligible to claim or unlikely to benefit from the policies.