Destroying the Founding Deed

One of the easiest ways of cheating Members out of their lawful entitlements is to destroy the founding Deed of the Trust and replace it with a “new” Deed that provides for much lower benefits.

Members should always check the Deeds since they should refer back to the original founding Deed.

The Rules of the Fund can be amended from time to time, however there will be provisions to safeguard the entitlements of the Members of the Fund.

Typically the Rules will require the Fund Actuary to provide an Actuarial Certificate certifying that the amendment has not reduced Member entitlements. It the proposed amendment reduces Member entitlements, then the Members will have to agree in writing to the proposed amendment. The statutory minimum level of acceptances required in two-thirds {Regulation 13.16 of the Superannuation Industry (Supervision) Regulations 1994} , however the Rules of the Fund may prescribe a higher level, for example 75%.

Every member of a Government Regulated Superannuation Fund should obtain a copy of the founding Deed of his or her fund plus copies of all properly executed subsequent amendments when they receive a superannuation benefit. This set of Fund Documents is the legal basis of the Fund and is the starting point if there is a dispute over the quantum of the superannuation benefit as well as what are the valid Conditions of Release that empowers the Trustee to release a superannuation benefit.

It is important to obtain copies of these Fund Documents. The Trustee must provide copies “free-of-charge” say on a CD-Rom if there are many documents within one month of receiving a written request for these Fund Documents.

Refer to subsection 1017C(5) of the Corporations Act 2001 and Regulations 7.9.45 and Schedule 10A 11.1 of the Corporations Regulations 2001. It is a criminal offence under Item 297B of Schedule 3 of the Corporations Act 2001 for an Officer of the Trustee to refuse to provide copies (or allow photocopies to be taken) to a Member or Beneficiary of the Fund.

An easy way to cheat members out of their lawful superannuation entitlements is to execute a new Deed which reduces benefits and then destroy the founding Deed and subsequent amendments up until the new Deed. This way Members have no evidence that their entitlements have in fact been illegally reduced.

Therefore always obtain a copy of the founding Deed plus all subsequent properly executed amendments with associated Actuarial Certificates.

This will ensure that you have not been a victim of a fraud where the founding Deed was deliberately destroyed so that a “new” Deed could be passed off to members that provides for much lower benefits.

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