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MLC reaches $64.2m class action settlement
Maurice Blackburn has announced it has reached a settlement with MLC over a class action alleging delays in transferring members to MySuper products.
In a statement on Friday, the law firm confirmed some 33,000 super members would share in a considerable $64.25 million settlement, inclusive of legal fees and subject to court approval.
The class action had been filed in the Victorian Supreme Court against the current and former trustees of the MLC Super Fund, NULIS Nominees (Australia) Limited and MLC Nominees Pty Limited.
Formerly the NAB MySuper class action, it alleged the super fund had delayed in transferring members to MySuper products, thus negatively impacting their retirement incomes.
Particularly, the class action related to accrued default amounts (ADAs) held by MLC super members for which the relevant member did not provide an investment direction.
Under the Stronger Super Reforms introduced by the government, from January 2014, all super contributions for which members did not provide an investment direction were required to be paid into a simple low cost 'MySuper' option.
All contributions made before January 2014, as in ADAs, were required to be transferred to a simple low cost 'MySuper' option by no later than 30 June 2017.
The class action alleged that although their ADAs were transferred to a MySuper option before 30 June 2017, MLC Super contravened their statutory and general law duties to their members by failing to make the transfers to MySuper as soon as reasonably practicable.
Maurice Blackburn principal lawyer, Nina Abbey, explained the class action alleged that delays in transferring more than $6.8 billion of “accrued default amounts” to the lower cost, MySuper product had resulted in higher fees and commissions, and lower investment returns for an extended period.
The proceeding had been set to commence a four-week trial on 18 November 2024.
However, a settlement was reached without admission of liability from either defendant.
“Superannuation is often the greatest asset Australians have, and is crucial to a dignified retirement. The High Court has recognised the valuable status of superannuation as ‘deferred pay',” said Abbey.
“MySuper was introduced to protect the retirement outcomes of millions of Australians who had not made an active decision about how their super was invested. The reforms ensured that following the transfer to MySuper, default members would no longer be charged expensive fees or commissions that they had not actively selected."
Abbey said the firm was pleased to have reached this settlement that will provide a “welcome boost” to fund members’ retirement incomes.
“This will hopefully provide some much-welcomed relief to superannuation members who - like all Australians - are struggling with the rising cost of living,” she said.
If approved by the court, the settlement means eligible class action members should start receiving settlement payments into their superannuation accounts next year.
In a statement to the ASX on Friday, Insignia Financial, which acquired MLC from NAB in 2021, said NAB remains liable for the cost associated with the class action filed on behalf of certain members of the former The Universal Super Scheme and MLC Super Fund.
Additionally, it noted a judgment made on Monday 12 December 2024 in favour of NULIS in a separate class action.
"The Trustees were acquired from National Australia Bank Limited (NAB) in May 2021. While they are no longer part of the NAB group of companies following completion of that acquisition, NAB remains liable for the costs associated with both class actions, including the agreed settlement amount (less any related tax benefit obtained by Insignia Financial)," it said.
"Insignia Financial is pleased to confirm that, other than processes for Court approval of settlements and any appeal, all class actions against companies within the Insignia Financial Group have concluded."
AUTHOR
Rhea Nath
Rhea L Nath is a journalist on Super Review and InvestorDaily, with a focus on funds management, superannuation, and institutional investment. Previously, she covered small business and entrepreneurship news at Dynamic Business and multicultural issues at Indian Link Media Group. In 2022, she was named Young Journalist of the Year at the NSW Premier’s Multicultural Communications Awards.
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