Unlawfully Changing the Governing Rules Fraud

The Governing Rules of superannuation funds need to be amended from time to time. Some amendments are for purely administrative reasons and have no impact of the entitlement of members. The Rules of the Fund will generally included a “Rule for changing the Rules” and in the case of Government Regulated Superannuation Funds there are statutory provisions as well such as Regulation 13.16 of the Superannuation Industry (Supervision) Regulations 1994, which requires the written approval of at least 66% of the Membership for any proposed amendment that would reduce member entitlements.

.However it is not uncommon for the Governing Rules a Superannuation Fund to be amended so as to:

  • (i) Reduce member entitlements,
  • (ii) Allow an actuarial surplus to be returned to the Employer, or
  • (iii) both (i) and (ii).

without the consent of the Members being obtained.

Members need to be vigilant and monitor amendments that have been made to the Governing Rules of their fund and to understand that the Governing Rules are not a single document but a “set” of documents that includes the founding trust instrument plus all subsequent Resolutions or Deeds of Amendment.

Members should obtain copies of the Fund Documents from the Trustee of their Fund and inspect them to ensure any amendments that would reduce Member entitlements have received the appropriate statutory approval and the approval required by the Rules themselves.

These principles are referred to in Re UEB Industries Ltd Pension Plan[1992] 1 NZLR 294; ASEA Brown Boveri Superannuation Fund No. 1 Pty Ltd v ASEA Brown Boveri Pty Ltd [1999] 1 V.R. 144 and Lock v Westpac Banking Corporation and others (1991) 25 NSWLR 593

Australian Guardians – Protecting your wealth when no one else will®


Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>