Superannuation Minister Jane Hume ‘not comfortable’ with funds paying fines with member money

Super funds have generally kept quiet when asked about the issue, although Australian Super Chief Executive Paul Schroder said in November he viewed the $ 250 billion fund’s members as “effectively” Australian Super shareholders, rather than its legal shareholders, which are the Australian Council of Trade Unions the Australian Industry Group.

Employer groups and unions have dodged requests for comments on the issue.

Senator Hume said she was “going to keep an eye on” the issue and said it was the job of regulators to “manage” the implementation of the law.

“I would hope we wouldn’t have to get to a stage where we need to legislate to stop this behavior, but certainly it goes against … the direction of the reforms we’ve been taking to superannuation in the last three years , ”She said.

The chairman of the Australian Prudential Regulation Authority, Wayne Byres, told the House of Representatives Standing Committee on Economics in February the regulator did not think super funds were breaking any rules by establishing trustee “resilience” reserves.

In most cases, the reserves have been capitalized by transferring money from existing reserves of members’ money.

However, Hostplus announced in February it would charge members a new monthly fee from March 31, as the fund aims to build a $ 54 million rainy day reserve to pay fines levied against its directors.

Ms Hume said fund members’ were trusting funds to manage their retirement savings prudently.

“Essentially carving out members money and putting it in the hands of trustees to pay for their own misconduct … that just doesn’t sit very comfortably with me,” she said.

She has previously threatened to pass new laws to stamp out the behavior, calling on unions and employer groups to “cough up” in November.

Coalition MPs have accused super funds of circumventing the Section 56 amendment by changing their trust deeds to establish multi-million dollar funds to pay fines.

Appearing before the Senate economics committee in February, Treasury deputy secretary Meghan Quinn said the agency was aware “certainly prior to November 2019” that funds could try to alter their trust deeds to minimize the effect of the Section 56 amendment.

“We would have raised this issue as part of our briefing process in relation to the legislation and the policy intent of the government had with that legislation, so from November 2019,” Ms Quinn said.

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