National Australia Bank’s superannuation trustees have been hit with a new class action for allegedly ripping off more than 330,000 clients by failing to move them into lower cost default products.
- MLC and NULIS Nominees are the two super trustees being sued in this class action
- They allegedly left client’s nest eggs in funds with high fees and lower returns
- Maurice Blackburn will argue the NAB trustees failed to act in the clients’ best interests
Plaintiff law firm Maurice Blackburn filed the case in the Victorian Supreme Court on Wednesday, claiming that two of NAB’s super trustees breached their duties and failed to act in the best interests of clients.
The alleged breaches committed by MLC Nominees and NULIS Nominees come after their parent company, NAB, copped scathing criticism at the banking royal commission for repeated breaches of superannuation laws.
The class action alleges that NAB trustees left clients “idling in products” with higher fees and commissions to financial advisers that are outlawed in the low cost default MySuper product — while also earning lower returns.
Super conflicts of interest
The case will focus on NAB’s alleged failure to transfer $6.3 billion of default retirement nest eggs to MySuper in a timely fashion, said Maurice Blackburn’s national head of class actions Andrew Watson.
“This is another regrettable case of mismanagement in the superannuation sector,” he 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.”
Mr Watson said NAB trustees had a responsibility to act in the best interests of superannuation clients rather than the interests of NAB’s financial advisers.
“Taken as a whole, the evidence shows that NAB and NULIS … did not move with all deliberate speed to effect the transfers,” he argued.
“I consider that they did not do that for fear of how advisers would react to the loss of commissions that would follow from the transfer.”
In November, NAB settled a class action for $49.5 million to compensate tens of thousands of customers who were sold junk credit card and personal loan insurance, through its subsidiary MLC.
After the high-profile banking inquiry, Commissioner Kenneth Hayne referred NAB’s repeated breaches to the Australian Prudential Regulation Authority (APRA) for possible civil or criminal proceedings.
NAB’s (then) chief executive and chairman, Andrew Thorburn and Ken Henry, were forced to resign last February after they were sharply criticised in Mr Hayne’s final report.
The royal commission also claimed the scalp of senior executive Andrew Hagger who was rebuked for withholding information from regulators about the “fees for no service” scandal.