Australian Guardians is collating the results of Australia’s first Superannuation Industry Disclosure Compliance Test.
The Preliminary Results to date are:
The majority of Trustees (approx 70%) complied with their disclosure obligations under SIS Regulation 2.33(2) and SIS Regulation 2.32, however a substantial number who complied appeared to have inadequate compliance procedures in place to confirm compliance to the “independent” Fund Auditor.
It would appear that it is a common practice for some “independent” Fund Auditors who have been engaged to protect the interests of the members and beneficiaries of the fund to simply “rubber stamp” compliance with regulatory requirements without undertaking any due diligence.
A significant number of Trustees (Approx 30%) failed to comply with their disclosure obligations under SIS Regulation 2.33(2), which is one of the conditions imposed on the Trustee’s RSE Licence issued by the Prudential Regulator – APRA under Section 29E(1)(a) of the Superannuation Industry (Supervision) Act 1993.
APRA has the power under Section 29EB of the Superannuation Industry (Supervision) Act 1993 to “give a direction” to a Trustee to comply with their disclosure obligations, however APRA routinely turns a “blind eye” to far more serious criminal disclosure violation under Section 1017C of the Corporations Act 2001 and Items 296C and 297B of Schedule 3 of the Corporations Act 2001, so APRA will take no enforcement action against Trustees who fail to comply with SIS Regulation 2.33(2).
The “Independent” Fund Auditor is required to confirm that the Trustee has complied with their disclosure obligations in the annual Section 35C Report submitted to APRA, however it is clear from the results of the first Industry Wide Disclosure Compliance Test that many Auditors simply “Rubber Stamp” their Section 35C Reports that are submitted to APRA under Section 36 of the Superannuation Industry (Supervision) Act 1993.
This should be a concern to all Members of these Funds.
To find out if your Government Regulated Superannuation Fund is a “Red Flag” fund and that your hard earned superannuation entitlement is at risk become a Member of Australian Guardians today.
Australian Guardians will be conducting a more thorough Compliance Test where Members of Fund request copies of prescribed Fund Documents. In this case not only is it a condition on the RSE Licence issued by the Prudential Regulator- APRA to comply with these disclosure obligations, it is a criminal offence if Responsible Officers of the Trustee refuse to provide copies of the prescribed Fund Documents.
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