Slater and Gordon has filed a class action against Westpac subsidiaries BT Funds Management and Westpac Life Insurance Services.
The action, filed on behalf of thousands of superannuation members, alleges BT has been short-changing members who invested in the BT Super for Life cash-only option. It said that BT earned substantial fees for providing no valuable service.
The case is the third class action filed as part of the firm’s Get Your Super Back campaign launched off the back of the Banking Royal Commission. The firm has also filed class actions against Commonwealth Bank of Australia (CBA) and Colonial First State, as well as AMP.
“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,” said Nathan Rapaport, Slater and Gordon special counsel.
Slater and Gordon said that rather than investing member funds directly, BT chose Westpac Life as an intermediary. Westpac Life then invested in an externally managed cash fund.
“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%, but it delivered an interest rate of only 1.3% to members,” Rapaport said.
He said that they believe Westpac Life “provided no service that could justify it retaining such a large part of the returns generated from members’ money.” The class action seeks aims to get the difference paid back to members,” he said.
Therium Capital Management is funding the class action against the Westpac subsidiaries.