Powered by MOMENTUM MEDIA
subscribe to our newsletter

Superannuation class action filed against AMP

Slater and Gordon has filed a class action against AMP claiming compensation for more than 2 million people it alleges have been charged “excessive fees” on AMP superannuation accounts.

The law firm alleged that AMP trustees AMP Super and NM Super:

  • paid too much to related AMP entities for administration services
  • failed to secure an appropriate return on cash-only investment options

The class action is therefore claiming compensation for this conduct on behalf of the superannuation members.

It is estimated that more than 2 million people may have been affected by the “excessive fees” on their AMP superannuation accounts since 1 July 2008.

“Superannuation members trusted that AMP would act in their best interests when managing their retirement savings. Instead, they charged exorbitant fees,” Slater and Gordon senior associate Nathan Rapoport said. 

Advertisement
Advertisement

“Both AMP Super and NM Super, as trustees of the funds, should have taken steps to secure the best deal for members on a commercial arms-length basis. 

“Members whose funds were deposited in cash-only investment options were short-changed potentially thousands of dollars because they received interest rates below what a reasonable and diligent trustee could have obtained on the open market.”

Mr Rapoport noted that the banking royal commission had uncovered evidence of a particular group of AMP cash option members who received negative returns due to a combination of an uncompetitive interest rate and excessive fees, which the trustee was unaware of. 

“These customers would have been better off keeping their retirement savings under their bed,” Mr Rapoport said.

Noting the filing of the class action, AMP issued the following statement: “AMP acknowledges that a superannuation class action proceeding has been filed against certain of its subsidiaries by Slater and Gordon.

PROMOTED CONTENT


“The proceedings will be vigorously defended. 

“AMP and the trustees of its superannuation funds are firmly committed to acting in the best interests of their superannuation members and acting in accordance with legal and regulatory obligations. 

“We encourage any customers who have concerns to contact AMP.”

The wealth company added that it has already reduced the administration fees on some of its cash investment options to “address the issue of negative returns in the small number of funds impacted by this issue” and is also compensating affected customers for lost earnings. 

“In 2018, we cut fees on our flagship MySuper products, benefiting approximately 600,000 existing customers as well as new customers, improving member outcomes. In 2019, we also cut fees to MyNorth,” it added.

The Slater and Gordon case against AMP is the second to be filed under the litigator’s Get Your Super Back campaign that launched following the banking royal commission. The first class action launched under the campaign was against Colonial First State. 

This new class action is the latest of several class actions brought against AMP.

Following the banking royal commission, five law firms filed class action lawsuits against the financial services company seeking compensation on behalf of shareholders. 

The NSW Supreme Court last month selected Maurice Blackburn as the legal firm to take forward the shareholder class action against AMP for compensation following alleged breaches of the Corporations Act.

[Related: AMP could face three class action lawsuits]

Superannuation class action filed against AMP
mortgagebusiness

If you’re feeling overworked and overwhelmed in this fast-paced mortgage market, it’s time to make some changes, and the Business Accelerator Program can help! Tickets are on sale now. Work smarter, not harder, this year.

Annie Kane

Annie Kane is the editor of The Adviser and Mortgage Business.

As well as writing about the Australian broking industry, the mortgage market, financial regulation, fintechs and the wider lending landscape – Annie is also the host of the Elite Broker and In Focus podcasts and The Adviser Live webcasts. 

Contact Annie at: This email address is being protected from spambots. You need JavaScript enabled to view it.

Latest News

The financial services regulator has released examples of how the incoming rules for add-on insurance will work for CCI, among other credit ...

The major bank has said that it is committed to the sale of its Pacific businesses despite a competition regulator knocking back their propo...

A prime residential lender has announced the pricing of one of its largest prime residential mortgage-backed securities to date. ...

Join Australia's most informed brokers

Do you know which lenders are providing brokers and their customers with the best service?

Use this monthly data to make informed decisions about which lenders to use. Simply contribute to the survey and we'll send you the results directly to your inbox - completely free!

How long do you think it should take to discharge a mortgage?

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.