Filed by law firm Maurice Blackburn on Wednesday, the class action accuses NAB subsidiaries MLC Nominees and NULIS Nominees of leaving super customers “idling in products” with higher fees, commissions to financial advisers and lower investment returns. This caused “substantial losses” to fund members, the class action claims.
The case comes in the wake of the banking royal commission and Kenneth Hayne’s final report, which criticised NAB and other banks for repeatedly breaching superannuation law and prioritising commercial interests over those of members.
Why is NAB being sued?
NAB’s subsidiaries are being sued for allegedly breaching their duties as super trustees, including failing to act in the best interests of their customers.
Maurice Blackburn says the case will focus on their delay in moving over $6.3 billion of retirement savings held in default super accounts to low-fee MySuper accounts.
Introduced by the Gillard Labor government in 2012, MySuper accounts are designed to offer low fees, a basic level of insurance cover and one investment option.
Super funds were required to switch any accrued default amounts (ADAs) – that is, super where the member did not specify how they wanted it to be invested – over to a MySuper product by 1 July, 2017 as the ‘outer’ limit.
In his final report, Commissioner Hayne noted that the NAB trustees’ delay in doing so “prioritised the commercial interests of the NAB Group or the interests of advisers, or more probably, both”.
Maurice Blackburn alleges this caused default MasterKey Business Super and Personal Super members to pay higher fees and pay commissions to financial advisers that were banned in MySuper products – all while receiving lower investment returns.
“This is another regrettable case of mismanagement in the superannuation sector,” Andrew Watson, National Head of Class Actions at Maurice Blackburn said.
“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,” he said.
Who can join the class action?
Maurice Blackburn says you can register to join the NAB MySuper class action if:
- Your super was invested in the MLC MasterKey Business Super or MLC MasterKey Personal Super(MasterKey) product; and
- You held an ADA amount in MasterKey that was transferred by NULIS to an MLC MySuper product; and
- This occured on or about 3 December 2016 or 25 March 2017
You may also be able to join the class action in other circumstances as outlined on Maurice Blackburn’s website.
Aftermath of the banking royal commission
The fallout from the royal commission saw NAB CEO Andrew Thorburn and chair Ken Henry resign from the bank. Both men were heavily criticised in Commissioner Hayne’s final report, where he expressed doubts about whether they had learned from their mistakes.
This is not the first class action NAB has faced following the royal commission. Back in November, the bank paid $49.5 million in a settlement to customers who were sold ‘junk’ insurance policies for credit cards and personal loans.
MLC and NULIS are also currently facing Federal Court proceedings from ASIC, who alleges the NAB companies misled MasterKey super members and charged fees for no service.
Another superannuation class action was also launched yesterday against Colonial First State Super. Shine Lawyers alleges the Commonwealth Bank subsidiary “tipped” its super members into insurance policies with “excessive” premiums.