Most Members of the Division 2 final salary Defined Benefit Fund would be unaware that a Rule exists in the Governing Rules of the Fund that empowers the Trustee to convert a Lump Sum Benefit into a pension.
There was no mention made of this Rule during recent presentations given by the Fund Secretary.
Rule 2.3.7 empowers the Trustee, at the Trustee’s discretion, to convert any Lump Sum Benefit payable to a Member at or over the Early Retirement Age of 55.
If a Member terminates his or her Contract of Employment before attaining the Early Retirement Age of 55, then Rule 2.3.7 does not apply.
Rule 2.3.7 had not been publicised to Members for several decades by the Trustee.
The Deed of Amendment executed on 20 December 1982 empowered the Trustee to back a “buy-back” offer to existing pensioners and most accepted that offer.
Pension payment therefore remained under $100,000 per annual for the last two decades.
The in 2009 there was a massive increase in pension payments from $69,440 in 2008 to $1,356,320 million in 2009.
It would required a Lump Sum benefit of around $22 million to be converted into an annual pension of $1.3 million per annum.
Why the sudden 2000% increase in pension payments in one year with no further increases over the next two years?
An explanation is that around 45 Members of the Fund (with a average lump sum benefit of $500,000), most of whom would not know that the pension Rule existed, all of whom were aged 55 or older, all deciding to resign on mass in 2009, with no members age 55 or older more making that same decision over the next two years!
Australian Guardians has been attempting to put together a list of these 45 former members, but with little success to date. Can other Members please assist if they know the names of these 45 former Members?
If their is another explanation why has the Trustee and the supposedly “independent” Fund Auditor been unwilling to provide an explanation for the this sudden increase in pension payments?
Furthermore if the Trustee is paying pension to some Members why has the Trustee not advised other Members that the Governing Rules allows the Trustee to convert a lump sum payment into a pension?
A Trustee must act impartially between beneficiaries and not provide pensions to some Members and not to others.
Why the secrecy over these pension payments?
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