QSuper settles $67m class action

QSuper, which merged with Sunsuper to create Australian Retirement Trust (ART), Australia's second-largest super fund, has reached a $67 million out-of-court settlement over claims members were overcharged for life insurance premiums.

The settlement for the class action, which was brought against the fund in the Federal Court in November 2021, still requires court approval and is without admission of liability.

Shine Lawyers, which initiated the class action, alleged QSuper breached its obligations under the Corporations Act 2001 and the Superannuation Industry (Supervision) Act 1993 by failing to properly inform members of changes to life insurance premiums introduced in July 2016. Those changes, implemented before QSuper's merger, related to the introduction of occupational ratings for insurance purposes for its members.

An ART spokesperson said QSuper reached an in-principle settlement, which includes legal costs and disbursements, and other fees and costs associated with the class action, to avoid the risk of costs associated with ongoing litigation.

The spokesperson also said no member funds will be used to settle the class action.

"The settlement amount will come out of money that had already been set aside by QSuper to provide for the potential liability from the class action, which was put into a reserve at the time of the merger to form Australian Retirement Trust," the spokesperson said.

Should the in-principle settlement be approved, the spokesperson added that the court will determine the process for distributing the settlement amount to eligible members.

Shine Lawyers joint head of class actions Craig Allsopp welcomed the settlement.

Allsopp said the settlement brings "long-awaited relief" to affected fund members, most of whom, he noted, were Queensland government employees and their spouses.

He said many of these members, including teachers, doctors, and other essential workers, were charged higher premiums despite having lower occupational risk.