Powered by LawFuel – Slater and Gordon has filed a class action against Westpac subsidiaries on behalf of thousands of superannuation members who were shortchanged by the bank’s super funds.
The class action was filed against Westpac’s subsidiaries BT Funds Management Limited and Westpac Life Insurance Services Limited.
This is the third class action to be filed as part of Slater and Gordon’s Get Your Super Back campaign launched off the back of the Banking Royal Commission in 2018.
The case alleges BT has been shortchanging its members who invested in the BT Super for Life cash-only option by investing through Westpac Life and allowing it to earn substantial fees for providing no valuable service.
Rather than investing member funds directly, BT chose to use Westpac Life as an intermediary, who then invested the money in an externally managed cash fund.
Slater and Gordon Special Counsel Nathan Rapoport said Westpac Life was given complete discretion about the interest rates that it would pass on to members, and at times kept almost half of the returns on members’ money for itself. This has resulted in members losing out on potentially thousands of dollars over many years.
He said the class action alleged BT breached its duty to act in the best interests of its members, and that Westpac Life was involved in this breach.
“Superannuation members trusted BT with their retirement savings, but instead of seeking the best returns available for members, it appears BT chose to line the pockets of another entity in the Westpac group at the expense of its members,” Mr Rapoport said.
“In recent years Westpac Life actually achieved reasonable returns on members’ money, but the arrangement meant that it kept much of that benefit for itself. One year, Westpac Life earned returns of around 2.5 per cent, but it delivered an interest rate of only 1.3 per cent to members.
“We believe Westpac Life provided no service that could justify it retaining such a large part of the returns generated from members’ money, and we want the difference paid back to members.”
The case is funded by Therium Capital Management, a leading litigation funder based in the UK and Australia.