Retirement
CBA fails Aussies with super switching miscarriage, misleading language
Retirement
CBA fails Aussies with super switching miscarriage, misleading language
Thousands of Colonial First State customers were left in higher-cost funds, rather than shifted into lower-cost accounts as mandated by law, the royal commission has heard.
CBA fails Aussies with super switching miscarriage, misleading language
Thousands of Colonial First State customers were left in higher-cost funds, rather than shifted into lower-cost accounts as mandated by law, the royal commission has heard.
The 15,000 customers who had not chosen a fund were to be moved into basic MySuper accounts by 1 January 2014, however, as the commission heard, this did not eventuate.
The executive general manager of Commonwealth Bank-owned Colonial First State, Linda Elkins, said the decision came down to “operational risk”. Senior counsel Michael Hodge described it as an “offence”, while Ms Elkins preferred the term “error”.
However, the commission also heard that upon failed super-switch, Colonial First State began a campaign encouraging customers to remain in its fund to retain revenue.
Customers were told, “if this transfer proceeds, your ongoing fees and costs may increase”, and prompted to make an investment decision to remain in the fund.
Another flyer told customers they would pay transfer costs and the new insurance cover may not be suitable.
“Can I suggest this letter is obviously drafted in a way to make the member concerned and apprehensive about their [account] being transitioned over to MySuper?” Mr Hodge asked.
“I agree that this letter is not balanced.”
It was the preferred refrain for Ms Elkins, who also agreed a call-out script that told savers they needed to confirm the investment decisions they made or would like to make, was “not correct”. There was no such requirement.
She went on to say the script “should have been more balanced in the way it described [a requirement for an investment decision].”
However, Mr Hodge shot back, “When you say ‘more balanced’, do you mean not misleading?”
It was the first day of pain for Colonial First State, with Ms Elkins taking more questions this morning on its insurance premiums and the charging of fees to dead customers.
Follow along here.
RELATED ARTICLES
Superannuation
Expanding super for under-18s could help close the gender super gap, says Rest
In a push to address the gender disparity in superannuation savings, Rest, one of Australia's largest profit-to-member superannuation funds, has called for a significant policy change that would allow ...Read more
Superannuation
Employment Hero pioneers real-time super payments with HeroClear integration
In a significant leap forward for Australia's payroll and superannuation systems, Employment Hero, in collaboration with Zepto and OZEDI, has successfully processed the country's first ...Read more
Superannuation
Rest launches Rest Pay to streamline superannuation payments and boost member outcomes
In a significant move aimed at enhancing compliance with upcoming superannuation regulations, Rest, one of Australia’s largest profit-to-member superannuation funds, has unveiled an innovative ...Read more
Superannuation
Rest appoints experienced governance expert to bolster superannuation fund
Rest, one of Australia's largest profit-to-member superannuation funds, has announced the appointment of Ed Waters as the new Company Secretary. Waters, who brings with him over 15 years of extensive ...Read more
Superannuation
Small businesses brace for cash flow challenges as Payday Super becomes law
With the new Payday Super legislation now enacted, small businesses across Australia are preparing for a significant shift in how they manage superannuation contributions. The law, which mandates a ...Read more
Superannuation
Rest launches Innovate RAP to support fairer super outcomes for First Nations members
In a significant move towards reconciliation and inclusivity, Rest, one of Australia's largest profit-to-member superannuation funds, has unveiled its Innovate Reconciliation Action Plan (RAP)Read more
Superannuation
Payday super legislation promises fairer retirement for part-time and casual workers
In a landmark development for the Australian workforce, the recently passed Payday Super legislation is set to transform the retirement landscape for countless part-time and casual workersRead more
Superannuation
Payday Super passes as Employment Hero, OZEDI and Zepto unite to help small businesses meet new seven-day payment rule
With the Payday Superannuation Bill officially passing through Parliament, Australian businesses are now less than eight months away from a major shift in how superannuation contributions are made — ...Read more
Superannuation
Expanding super for under-18s could help close the gender super gap, says Rest
In a push to address the gender disparity in superannuation savings, Rest, one of Australia's largest profit-to-member superannuation funds, has called for a significant policy change that would allow ...Read more
Superannuation
Employment Hero pioneers real-time super payments with HeroClear integration
In a significant leap forward for Australia's payroll and superannuation systems, Employment Hero, in collaboration with Zepto and OZEDI, has successfully processed the country's first ...Read more
Superannuation
Rest launches Rest Pay to streamline superannuation payments and boost member outcomes
In a significant move aimed at enhancing compliance with upcoming superannuation regulations, Rest, one of Australia’s largest profit-to-member superannuation funds, has unveiled an innovative ...Read more
Superannuation
Rest appoints experienced governance expert to bolster superannuation fund
Rest, one of Australia's largest profit-to-member superannuation funds, has announced the appointment of Ed Waters as the new Company Secretary. Waters, who brings with him over 15 years of extensive ...Read more
Superannuation
Small businesses brace for cash flow challenges as Payday Super becomes law
With the new Payday Super legislation now enacted, small businesses across Australia are preparing for a significant shift in how they manage superannuation contributions. The law, which mandates a ...Read more
Superannuation
Rest launches Innovate RAP to support fairer super outcomes for First Nations members
In a significant move towards reconciliation and inclusivity, Rest, one of Australia's largest profit-to-member superannuation funds, has unveiled its Innovate Reconciliation Action Plan (RAP)Read more
Superannuation
Payday super legislation promises fairer retirement for part-time and casual workers
In a landmark development for the Australian workforce, the recently passed Payday Super legislation is set to transform the retirement landscape for countless part-time and casual workersRead more
Superannuation
Payday Super passes as Employment Hero, OZEDI and Zepto unite to help small businesses meet new seven-day payment rule
With the Payday Superannuation Bill officially passing through Parliament, Australian businesses are now less than eight months away from a major shift in how superannuation contributions are made — ...Read more
