CBA Colonial First State Settlement Explained for Super Fund Members

Last updated: June 14, 2024

The Australian superannuation landscape has faced heightened scrutiny in recent years, with an increasing number of customers paying close attention to how their retirement savings are managed. One of the most impactful cases is the CBA Colonial First State settlement—an event that brings important lessons and potential compensation to hundreds of thousands of super fund members. If you have ever wondered about your fund’s fees, policies, or your own eligibility in this class action, understanding this issue is critical.

Understanding the Settlement: Key Background

The Colonial First State (CFS) settlement arises from a large-scale class action lawsuit against one of Australia’s leading super providers. Colonial First State, which was formerly owned by Commonwealth Bank (CBA), came under legal fire for allegedly delaying the switch of members from legacy super products into the lower-fee MySuper options. This delay meant affected members paid higher costs for longer, undermining their retirement outcomes. The action, led by Maurice Blackburn lawyers, has resulted in a $100 million proposed settlement—one of the largest of its kind in the Australian super industry.

• Colonial First State: Major provider previously owned by CBA
• Class Action: Represented hundreds of thousands of customers from 2013–2020
• Settlement: $100 million payout, awaiting Federal Court approval

Why Was the Settlement Necessary?

The Royal Commission into Misconduct in the Banking, Superannuation, and Financial Services Industry revealed significant shortcomings in the way super funds were managed, especially regarding fee transparency and customer-first practices. CFS was found to have kept members in higher-cost superannuation products even after more affordable MySuper options were introduced, resulting in excess fee charges for many Australians. The settlement allows for compensation without a protracted court battle, aiming to right some of these wrongs and restore consumer trust.

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Who Is Impacted by the Class Action?

Anyone who held a Colonial First State super account, especially in FirstChoice Employer Super, between the years 2013 to 2020 may be impacted. Most affected customers have been notified by Maurice Blackburn, but it’s wise to verify your own eligibility either with the law firm or Colonial First State directly. The settlement particularly applies to those who were not transferred to MySuper products in a timely manner, as intended under government reforms.

How Is Compensation Calculated?

Payouts will depend on individual circumstances—primarily how much a member had invested, the length of time funds were kept in legacy products, and the excess fees paid. While estimates vary, most eligible members can expect compensation ranging from several hundred to several thousand dollars. Final amounts will be confirmed following approval of the settlement and calculation by the legal teams.

What Actions Should Super Fund Members Take?

1. Check Your Eligibility: Review past super statements or log into your Colonial First State account for the relevant years.
2. Register for Updates: If you have not been contacted but believe you are affected, visit the official class action page for more details.
3. Follow Official Instructions: Monitor for communication regarding compensation disbursement, which will be coordinated post-court approval.

Timeline: Major Events of the Colonial First State Case

Broader Impact on Superannuation Policy

This class action demonstrates the pressure on super funds to prioritize member interests, stay compliant with reforms, and maintain transparent operations. Increased public demand for accountability has driven better communication and oversight across the superannuation industry. Customers now have a stronger voice and clearer recourse in cases of industry misconduct.

• Over 500,000 Australians affected
• Legal action led to historic $100 million settlement
• Average super fees can heavily impact long-term retirement savings

Next Steps for Super Fund Members

If you held a Colonial First State super account during the impact years, take the following steps:

• Check your eligibility for compensation
• Sign up for updates from Maurice Blackburn
• Consider reviewing current super settings and fees to ensure ongoing compliance and benefits

Key References & Further Reading

• Colonial First State Official Site
• Maurice Blackburn – Class Action Details
• Commonwealth Bank of Australia
• Moneysmart – Government Super Guide

Author: Akshat Malik is a financial journalist and analyst focused on consumer rights in Australia’s banking and superannuation industries. View LinkedIn Profile