Unlawful Termination Fraud

When a person joins a Government Regulated Superannuation Fund that person becomes a “Member” of the Fund and retains membership until such time as a valid “Condition of Release” event occurs as prescribed in the Governing Rules of the Fund.

Once the “Condition of Release” event occurs and the Trustee has obtained supporting documentation confirming the occurrence of the release event, then the Trustee (or an agent such as the Fund Administrator) is empowered by the Governing Rules of the Fund to release a lump sum benefit (or a pension) to that Member, who now becomes a “Beneficiary” of that Fund.

Typical Conditions of Release events are:

  • The Member attains the Normal Retirement Age of 65
  • The Member dies
  • The Member becomes totally and permanently disabled

Other potential Condition of Release events are:

  • The Member decides to terminate his or her Contract of Employment (Resignation)
  • The Employer decides to terminate the Member’s Contract of Employment (Retrenchment) on the basis that the Employee’s role has become Redundant

What happens in these two circumstances will depend on the Rules of the Governing Rules of the Fund.

Some funds are deferred benefit funds where a Member who is Retrenched or Resigns is entitled to remain a Member of the Fund until another valid Condition of Release event occurs such as the Member attains the Normal Retirement Age of 65.

Funds will often have a Rule that prescribes a Member’s Resignation from the Employer-Sponsor as a valid Condition of Release event empowering the Trustee (or the Fund Administrator) to pay out a lump sum benefit once the Trustee has received a copy of the Employee’s Letter of Resignation.

Funds may also have a Rule that prescribes a Member’s Retrenchment by the Employer-Sponsor as a valid Condition of Release event empowering the Trustee (or the Fund Administrator) to pay out a lump sum benefit once the Trustee has received a copy of the Employer’s Notice of Retrenchment that was given to the member by the Employer.

Therefore if an Employee either resigns or is retrenched then it is extremely important for that Employee to always check the Governing Rules of their Fund to check what are the Rules of the Fund pertaining to valid Condition of Release events.

It is extremely easy for a dishonest Trustee to bluff Members who have been Retrenched (or Resigned) that this entitles the Trustee to terminate their Fund Membership, even when the Governing Rules of the Fund state otherwise.

The Trustee relies on the fact that most Members never bother to obtain a copy of the Governing Rules of the Fund anyway.

If the occasional Member does request a copy of the Governing Rules, the Trustee just ignores the request, even though it is a criminal offence to refuse to provide a copy within one month of a written request.

The dishonest Trustee will have put in place an “arrangement” with ASIC so that Officers of ASIC will not enforce Section 1017C(5) of the Corporations Act 2001.

{Refer to the Dossier Tab for case histories in the archives of Australian Guardians where Officers of ASIC have attempted to blocked Members and Beneficiaries access to Trust Documents that those Members and Beneficiaries have an equitable interest in and are lawfully entitled to have copies of}.

Depending on the age of the Member who is Retrenched (or Resigns) if this Member has been a victim of the Unlawful Termination Fraud, the claim for a Breach of Trust can be very substantial running into the hundreds of thousands of dollars.

If you have been Retrenched by your employer and would like to find out if you have been a victim of the Unlawful Termination Fraud then become a member of Australian Guardians today.

Email ausguardian@gmail.com or leave contact details below.

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

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