Red Flag Fund Administrators

Many Trustees will engage specialist firms an an agent of the Trustee to handle the day-to-day administrative tasks of the Fund.

The Fund Administrator handles the “paperwork” and calculates benefit payments and then releases the payment once a valid Condition of Release event occurs to a Member of the Fund.

Since large amounts are involved in a typical superannuation benefit payment the Fund Administrator should ensure that the appropriate evidentiary documents are obtained before the large benefit payment is released. For example a certified copy of a Member’s Death Certificate should be provided by the Member’s dependents before the Administrator releases a Death Benefit.

Since the Fund Administrator is acting as an agent for the Trustee, the Fund Administrator should understand the Trust Deed and Governing Rules of the Fund and be aware on any amendments that are made from time to time to the Rules of the Fund.

If the Fund Administrator does not bother to properly understand the Rules of the Fund and then pays benefits that are not in accordance with those Rules, then a claim for a Tort of Negligence may lie against the Administrator.

If the Fund Administrator has knowledge that the Trustee is engaged in a fraud against the Membership of the Fund, then the Fund Administrator would become liable in a Breach of Trust action as a “Knowing Assistant” (or Dishonest Assistant) to the fraudulent design of the part of the Trustee {the second limb of Barnes v Addy}.

The Fund Administrator also produces Annual Member Statements and the Annual Report to Members and another information for Members. It is easy to mislead Members as to their lawful entitlements if false and misleading statements are made in these documents produced by the Fund Administrator.

Australian Guardians is compiling a list of Fund Administrators, some of whom are associated with major banks and international firms. Australian Guardians will put Fund Administrators on notice if Members advise fraudulent conduct on the part of the Trustees of their superannuation fund.

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