Super fund wouldn’t let members leave
Legal proceedings have been lodged against major super fund Rest for allegedly strong-arming members and denying them their right to switch providers.
The Australian Securities and Investments Commission has confirmed it will take one of the country's largest industry funds to the Federal Court, claiming Rest made false and misleading claims that discouraged members from leaving.
The corporate watchdog alleges the Retail Employees Superannuation Trust (Rest) between March 2015 and May 2018 "delayed or prevented" people from transferring their account to another superannuation fund - a legal right all Australian workers are entitled to.
It is understood the retail workers fund's alleged misleading behaviour occurred in both written and oral statements to members who flagged their intention to leave.
ASIC claims Rest told members a minimum of $5000 must be kept in accounts if they decided to leave and were still employed by an employer affiliated with the fund.
Members seeking to leave the fund were also allegedly told they needed to obtain an employer declaration to confirm a worker's "choice of fund rights" and that the workplace was willing to pay benefits into another super fund.
Rest also allegedly attempted to make members who had left jobs obtain separation certificates in order for the company to transfer accounts to a new fund.
The conduct was self-reported to the Australian Prudential Regulation Authority in 2018.
The regulator also alleges $14.8m in funds were retained from 1143 members whose rollover requests were refused or only partially completed.
Rest in a statement said it was remediating affected members.
"Rest is currently contacting and remediating members who may have experienced a delay in the transfer of their super as a result of the application of this business process between 1 January 2014 and 2 May 2018," the company said.
Originally published as Super fund wouldn't let members leave