NAB, MLC allegedly ‘ripped out’ millions in super fund scheme, court told

In an alleged “sorry state of affairs”, the Federal Court heard MLC members were charged fees and premiums to their superannuation accounts between 1 July 2016 and 23 September 2020 to fund the commissions “given in full” to financial services licensees.

Counsel for the group members said the commissions “came with no requirement for advisers to do anything” in exchange.

“The adviser can sit back in a comfy chair and just see the money hit the bank account and it was the group members who had the privilege of paying for that,” he said on Monday (9 October).

The class action has been brought against NULIS Nominees, a trustee for the MLC Super Fund. Until its sale to IOOF Holdings in May 2021, MLC existed under National Australia Bank (NAB).

In this ownership context, NULIS allegedly “ripped out” $165 million from members and only stopped a few months short of a “hard ban” introduced in January 2021 legislature.

Members had their funds in The Universal Superannuation Scheme (TUSS), of which MLC Nominees was the trustee, and were the subject of a non-consensual successive fund transfer.

Despite having other options, NAB appointed NULIS as the destination point for relevant members. Counsel for group members said this was because “NAB’s interests were being advanced”.

“As a result, the sole or principal reason that NAB chose NULIS was that it was seen as the best vehicle by which these commissions could be grandfathered. What we will also see … is a sense of a series of window dressing exercises,” he submitted.

In an example provided to the court, NULIS charged a “contribution fee” which was “not a fee for any work or effort by NULIS in the administration or operation” of the superannuation fund.

Instead, it was “just a mere pass though”.

“This is made even more clear when NULIS finally stopped these commissions. The so-called fee just disappeared.”

“The idea that this fee was a price for NULIS’ work is nonsense,” the group members have alleged.

The court was told the NULIS board was approached by people “whose job it was to make money for NAB” about the commissions.

“The very people on the board of NULIS had already told NAB in writing and before the matter came to the board for consideration that NULIS were on board with the scheme,” counsel alleged.

“The very people presenting the material to the board were hopelessly conflicted and preferred NAB’s interests.”

Counsel added it was “ironic but perhaps not surprising” that NULIS submissions has emphasised its process for charging the fees “but is silent on how charging members … were of a benefit to those members”.

“That silence is deafening,” he said.