Complaints Graveyard

Members of Government Regulated Superannuation Funds are led to believe by information provided in the Trustee’s Product Disclosure Statement that if they have a Complaint in relation to the benefit they receive from the Trustee,then they can take that Complaint to the Superannuation Complaints Tribunal for resolution.

But what these Members are not told is that the jurisdiction of the Tribunal is limited to where a Trustee has acted “within power” of the Governing Rules of the Fund and has made a “discretionary” decision that the Complainant believes to be “unfair or unreasonable“.

Typical complaints that fall into this category are:

  • The distribution of a Death Benefit amongst multiple dependents, and
  • Claims for Total and Permanent Disablement Benefits

Following the enactment of the  Superannuation Industry (Supervision) Legislation Amendment Act 1995 No.144, 1995  the Tribunal no longer has the statutory power to deal with complaints that involve a Trustee exceeding its power or misusing its power as is the case in a Breach of Trust where a benefit has not been determined strictly in accordance with the Trust Deed and Governing Rules of the Fund.

The Tribunal is a “complaint handling agency” and not a Superannuation Law Enforcement Agency.

The Prudential Regulator-APRA and ASIC are the Federal Government agencies that the Parliament of Australia has tasked to enforce Superannuation Law.

Section 64 of the Superannuation (Resolution of Complaints) Act 1993 requires the Chairperson of the Tribunal to give particulars of any actual or suspected contravention of “any law or governing rule” to APRA and/or ASIC.

This is not a discretionary power, the Chairperson MUST give particulars to at least one of the Superannuation Law enforcement agencies.

ASIC is responsible for the enforce of the disclosure obligations of Trustee’s of Government Regulated Superannuation Funds, whilst APRA is basically responsible for all other compliance matters, since it is a requirement of every Trustee’s RSE Licence issued by APRA to comply with RSE Licensee Law under Section 29E of the Superannuation Industry (Supervision) Act 1993 .

Specifically under subsection 29E(b) the duties of a Trustee must be properly performed.

One of the core duties of any Trustee is to act strictly in accordance with the Trust Instrument and not to commit any Breaches of Trust.

Therefore if a former Member (a Beneficiary) of a Government Regulated Superannuation Fund lodges a Complaint with the Tribunal alleging that they have not received their Benefit in accordance with the Governing Rules of the Fund, then this is an allegation that the Trustee has not performed the Trustee’s duties properly and has therefore committed a Breach of Trust.

Since this Complaint then relates to a suspected contravention of “any law or governing rule” of the Fund, then the Chairperson of the Tribunal MUST give particulars of this suspected contravention to APRA in the form of a Referral Under Section 64 Notice to APRA.

The Tribunal receives around 2500 written Complaints each year.

The Tribunal Chairperson claims that 17% of all Complaints relate to complaints about the determination of final salary Defined Benefits by Trustees of Government Regulated Superannuation Funds.

Therefore one would expect a large number of Referral Under Section 64 Notices to be sent by the Tribunal Chairperson to APRA each year providing particulars of the alleged Breach of Trust by the Trustee when determining the final salary Defined Benefit.

But how many Referral Under Section 64 Notices are in fact sent by the Tribunal Chairperson to APRA?

An average of about THREE Notices each year.

The following response received under the Freedom of Information Act 1982 confirms that the Tribunal Chairperson sent no Referral Under Section 64 in relation to alleged underpayments of final salary Defined Benefits to either APRA or ASIC in the year ending 30 June 2012, even though 17% of the Complaints received by the Tribunal are allegations that a Trustee of a Government Regulated Superannuation Fund has underpaid a final salary Defined Benefit.

This confirms that the Superannuation Complaints Tribunal acts as a “Complaints Graveyard” where Complaints concerning the fraudulent conduct by Trustees of Government Regulated Superannuation Funds are simply thrown into the waste paper bin.

The Trustees know that no enforcement action will be taken against them for fraudulent conduct so the frauds become bolder and multiply. Members of Government Regulated Superannuation Funds have been defrauded out of Billions of Dollars in entitlements, yet the Superannuation Complaints Tribunal takes no action to prevent this from happening.

The Minister of State  responsible for Superannuation also shows no concern for the very Members who elected the Minister to Parliament in the first place.

How safe do you feel your superannuation is when Complaints regarding serious allegations of fraudulent conduct are not referred to the Prudential Regulator-APRA as the Parliament of Australia intended, but such Complaints are simply thrown into the waste paper bin by the Chairperson of the Superannuation Complaints Tribunal?

If you have lodged a Complaint in relation to the determination of your Superannuation Benefit with the Superannuation Complaints Tribunal then Australian Guardians would like to hear from you.

Email ausguardian@gmail.com or leave contact details below

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

 

 

 

 

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