Lawsuit Filed Against Super Fund for Errors in Calculating Rail Worker Benefits

One of Australia’s biggest super funds is facing a lawsuit for allegedly impacting the retirement savings of Victorian transport workers.

Gordon Legal and the Rail Tram and Bus Union have initiated a class action in the Supreme Court against Emergency and State Services Super (ESSSuper).

According to Union branch secretary Vik Sharma, the fund is accused of not including shift penalty allowances in the calculation of super for some rail workers.

The class action estimates that unpaid entitlements could exceed $40 million (US$26 million) for both current and former workers who were or are members of the Transport Superannuation Fund.

“We’ve been addressing this issue for years, and now we have to take this drastic step,” Mr. Sharma stated on April 12.

ESSSuper serves as the dedicated super fund for emergency services and Victorian government employees, with over 127,000 members and assets of more than $36 billion (US$24 billion).

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Super calculations involve multiplying a person’s gross salary and wages by 11 percent. Overtime and expenses are excluded, but some bonuses and allowances are included.

Gordon Legal partner James Naughton pointed out that shift penalty allowances are a crucial component of transport workers’ income and should have been taken into account.

“The legislation governing this scheme allows ESSS to include these shift penalty loadings in the calculation, but they failed to do so for these transport workers while applying it for others under ESSS,” he explained.

Not considering shift penalties resulted in a 20 to 30 percent reduction in total super, potentially costing each worker hundreds of thousands of dollars, Mr. Naughton revealed.

One of the lead applicants, Elwyn Gonsalvez, mentioned that the exclusion of his allowances had left him up to $90,000 (US$58,000) worse off after working for over 45 years.

Mr. Naughton emphasized that ESSSuper has a responsibility to safeguard beneficiaries, and the class action was the final recourse after initially raising the issue with their board in January 2022.

“Instead of cooperating, the board shifted blame to other parties,” he added.

Gordon Legal estimates that while they are currently aware of dozens of impacted workers, the actual number could be significantly higher.

They urge current or retired Victorian transport workers to verify their membership in the transport fund to determine if they are eligible for compensation.

Robbie Campo, the CEO of ESSSuper, stated that the fund reached out to the union’s representatives on April 12 to address their claim.

“We hope to resolve this matter through discussions with the union and engagement with Metro Trains, the primary employer of most of these members,” she expressed.

A spokesperson for the Victorian government indicated that the class action was a concern for Metro Trains, the union, and ESSSuper.

Metro Trains declined to provide a comment.