Westpac to pay $29m in super class action

Tens of thousands of Australians could benefit from a $29.95 million payout from Westpac following a class action settlement with law firm Slater Gordon.

The law firm filed a class action suit against the bank’s subsidiaries, BT Funds Management and Westpac Life Insurance Services, in September 2019 on behalf of customers that were allegedly shortchanged by the bank’s super funds.

The class action alleged that members who invested in the BT Super for Life cash-only option received lower returns because BT invested their super funds through Westpac Life, which allowed Westpac Life to earn fees without providing any notable service.

The settlement is now subject to Federal Court approval. It was negotiated on behalf of customers who had invested their super in the BT Super cash option between 2007 and 2019.

This was the third class action filed as part of the law firm’s “Get Your Super Back” campaign, which was launched off the back of the Banking Royal Commission in 2018, to help the victims of “super rip-offs” receive compensation.

Slater and Gordon special counsel Nathan Rapoport said the class action alleged BT had breached its duty to act in the best interests of its members. “The case alleged BT prioritised Westpac Life’s profits over its duty to seek the best returns available for its members’ retirement savings, leading to lower returns for members,” he said.

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Rapoport claimed that Westpac Life had achieved “reasonable returns on members’ money”; however, the majority of those returns were not passed onto said members.

“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,” he said.