Aussie Grandmother Faces Working Until Death After Superannuation Collapse Wipes Out $139,000

Debbie Simpson, a 61-year-old grandmother from Queensland, Australia, faces the prospect of working for the remainder of her life after a catastrophic collapse of her superannuation fund erased $139,000 of her retirement savings. The incident left her with a mere $9 in her nest egg.

Simpson had spent approximately 50 years building her retirement fund. In 2023, seeking stronger returns, she transferred her superannuation to a fund linked to First Guardian. She utilized an online comparison tool, which led to a call from a financial advisor associated with Rhys Reilly, an authorized representative of Interprac. Nearly two years later, she discovered the collapse of First Guardian, which had managed her funds through YourChoice Super, invested in the First Guardian Growth Strategies Fund.

"I had never heard of this name before," Simpson stated. "I didn't even know that it was part of it." Her attempts to move her money out of YourChoice Super, which later transitioned to Praemium, were unsuccessful. She described the moment she realized her balance was frozen as a feeling akin to "going to have a breakdown."

Simpson is not alone in her predicament. Ariel Mack, a 48-year-old single mother from Melbourne, revealed a similar loss of $168,000 due to the same collapse. Mack also turned to an online comparison website in October 2023, where an advisor persuaded her to move her super into the AusPrac investment fund, assuring her of healthy returns within five to 10 years, despite her aim to avoid high-risk investments. She paid significant advice fees before her super was transferred.

Australian Securities and Investments Commission (ASIC) has initiated Federal Court proceedings against Diversa Trustees Limited, the trustee for Ausprac. ASIC alleges that Diversa failed in its duties by not adequately warning members about the fund's illiquidity risks, leaving investors vulnerable when withdrawals were frozen and the fund subsequently entered liquidation. ASIC is seeking compensation orders, including the possibility of a remediation program, to help investors recover their losses.

Diversa has denied the allegations, arguing in its defense that the losses were caused by alleged fraud and the actions of First Guardian's trustee, directors, financial advisors, and platform operators. The company maintains it acted in the best interests of its members at all times. Managing director Andrew Peterson acknowledged the difficult period for affected members and expressed commitment to rectifying the fraud and holding those responsible accountable. Diversa has also formally requested financial assistance for affected members from the Federal Government, deeming the case for such aid compelling.