A superannuation trustee accused of taking $165 million from beneficiaries as part of a grandfathering commission “scheme” said the allegations were “inaccurate, unfair and contrary to principle”.
NULIS Nominees, a trustee for the MLC Super Fund, is facing a class action in the Federal Court over allegations it charged fees and premiums to millions of beneficiaries between 1 July 2016 and 23 September 2020 to fund commissions and did not provide a service.
At the time, NULIS was the trustee for The Universal Superannuation Scheme (TUSS). The court heard NULIS was appointed as a destination point for a non-consensual successor fund transfer.
The class action also alleged NULIS and the National Australia Bank (NAB) – which owned MLC at the time – had schemed to ensure the NULIS board and the bank’s interests came before the beneficiaries.
In this context, counsel for the beneficiaries said NULIS “ripped out” $165 million from its members and only stopped a few months short of a “hard ban” on commissions, introduced in January 2021 legislation.
Speaking to the court on Tuesday (10 October), barrister for NULIS, David Thomas, said the attack by the lead applicant, Mervyn Lawrence Brady, is “inaccurate (and) unfair” because he had been given detailed information about the fees, including the commissions.
“(We) reject utterly that it is open to (the applicants) to suggest there was a scheme by which from September 2015, NAB and NULIS had agreed to maintain grandfathering of commissions,” Thomas said.
“That scheme or done deal submission has been put in various ways and it has been put that there was an appearance of process.
“Those allegations are very serious.”
In his opening submissions, Thomas said that after the successor fund transfer, Brady’s member package “remained relatively unchanged” and he found himself in “precisely the same position”.
“The account remained the same, the benefits remained the same, the investment options remained the same, and the fees payable by Mr Brady remained the same,” Thomas said.
“The terms of the trust deed that authorised the charging of the fees by NULIS were identical to that administered by MLC.”
Thomas added the only thing that changed “was the identity of the trustee”.
As for the decision to allow the grandfathering of commission, Thomas disputed the applicant’s allegations that this was rushed through and done to the benefit of NULIS and NAB.
Instead, he said the decision was “careful, considered and robust”.
Thomas said NULIS had been approached with the commission material in April 2016, but had turned it down because they were not satisfied. The commissions were only accepted after NULIS received more appropriate material, the court was told.
“This was to the board’s credit and is inconsistent with grandfathering being a ‘done deal’ after 2016,” Thomas said.
This article first appeared on Super Review’s sister publication Lawyers Weekly.
