On Tuesday, Australia’s corporate regulator stated, it has filed a civil lawsuit against Commonwealth Bank of Australia’s pension business for deceptive product communication.
“Product communication by Colonial First State Investments between March 2014 and August 2016 hindered customers of the FirstChoice Fund from transitioning to the cheaper MySuper fund”, said the Australian Securities and Investments Commission (ASIC).
“It is notable that a total of 8,605 members provided an investment direction keeping them in the existing product,” said ASIC.
In 2014, the Australian government had ordered superannuation funds, which essentially are operators of pension funds, to move customers with default investment options to the cheaper and simpler MySuper scheme.
The MySuper fund was designed as a part of a government-mandated scheme to provide workers with an economical pension fund, that could be run by investment managers as trustees.
The court will now determine the quantum of penalty on the charges based on submissions made by both parties, said ASIC.
CBA wasn’t immediately available for comment.