Legal recourse possible on Westpac super.

Press, 26 January 1988, Page 23

Legal recourse possible on Westpac super.

PA Wellington Westpac Group superannuation plan members could take legal action over heavy losses to the fund due to sharemarket speculation. The value of Westpac’s fund has been reported to have fallen by 20 to 25 per cent and this shortfall may be cutting into the scheme’s pay outs. An elderly fund member, who did not wish to be named, said she was upset that the fund was not guaranteed. She was not aware that it could lose money from its sharemarket investment. Her fund had gone down by about 20 per cent, she was told by the bank when she phoned to discuss her position. However, there may be legal recourse for members who feel they were not made fully aware of the speculative nature of the scheme. In a January 12 press release the bank acknowledged there could be confusion over the nature of the scheme. It said that'some individual contributors “may have misunderstood the purpose of the plan and the fluctuating nature of the underlying investment.” For this reason the

bank said it would take steps to restore certain members funds to an amount not less than their contributions. The booklet used to promote the scheme clearly states: “the amount you are finally eligible for is the total of all your contributions, plus your share of all earnings your contributions have continued to generate ...” There is no indication in the booklet that members may in fact lose money. Westpac legal adviser, Mr Bruce Bornholdt, said yesterday that members could have been misled by the bank’s promotional booklet. It was on this assumption that the bank issued the press statement saying it would restore certain funds to the amount of contributions. He could not give the criteria for those members who would have their funds restored. The booklet has been withdrawn from the market and is part of a Westpac investigation into the super scheme. The outcome of the investigation into the seven-year-old scheme is expected to be available next week, Mr Bornholdt said.