POWERED BY MOMENTUM MEDIA
CEO of Cbus says fund has 'huge benefit' from CFMEU relationship
The CEO of Cbus has defended the fund’s relationship with the CFMEU.
At Thursday's Senate economics committee hearing, Cbus CEO Kristian Fok discussed the “huge benefit” the fund gained from its financial support to the CFMEU, emphasising that while some of the funds were allocated to director fees, the majority was invested in partnership programs.
Fok explained that the spending provided substantial benefits, particularly in reaching out to the construction industry and raising awareness about the fund’s unique offerings.
“There is a huge benefit and a strong reason for us to reach out to people in the construction industry around the issues that are relevant in terms of our differentiated products,” he said.
In the 2023 financial year, super funds contributed some $4 million to the CFMEU, with Cbus accounting for the largest portion of that amount.
The fund has faced criticism in recent months over its close ties to the controversial CFMEU, which holds 21 per cent of the fund, with APRA in August instructing the fund to undertake a review into the extent of the its involvement in the union.
Reflecting on this, Fok explained that the independent review into Cbus’ governance and administration, will help determine whether the fund should continue its partnerships with the union.
“We are subject to this independent review, once we get those findings, we will look at the circumstance in light of those findings,” he said.
“Cbus will make commercial agreements which we think are in members’ best financial interests. We will take into account any findings that come from the independent review … If that continues to be a value driver, then we would expect it would be something that we would continue to pursue,” he elaborated.
The CEO kicked off his Senate economics appearance by apologising for the fund’s failure to look after customers making death benefit or disability insurance claims.
Namely, earlier this week, the corporate regulator revealed that it has filed civil penalty proceedings against United Super, the trustee of Cbus, for failing to process over 10,000 claims for death and total permanent disability (TPD) benefits in a timely manner, impacting more than 6,500 members.
The regulator alleged that the delays, which spanned more than 12 months for some claimants, resulted in an estimated $20 million in financial losses for members, with ASIC accusing the trustee of inadequate response and misleading reports regarding the ongoing issues.
Moreover, in its statement, the regulator alleged that despite the issue being raised with the Cbus Risk Committee between November 2022 and February 2023, the trustee failed to report the matter to ASIC within the required 30-day period.
Speaking on Thursday, Fok said the fund is “sorry”.
“Whilst we have been far from perfect, our board and our team did take action on delay”.
Recommended for you
Super Review understands that Cbus will be appearing at tomorrow’s Senate economics committee hearing.
Despite strong superannuation returns at the start of the financial year, super funds could be in for a rockier ride ahead with volatility expected to increase.
An industry veteran says superannuation funds should be doing more to help Australians manage their retirement savings while financial advice remains unattainable for many.
The industry fund has flagged the ASX-listed company for “recent governance failures” regarding its response to allegations made against its CEO.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
Spire Oaktree Opportunities XI Second Close
61.07 3 y p.a(%)
2
Spire Oaktree Opportunities XI First Close USD
59.21 3 y p.a(%)
3
DomaCom Lot 21 Chellaston Road Munno Para West SA 5115 Australia
31.56 3 y p.a(%)
4
Fidante Credit Suisse Global Private Equity
31.06 3 y p.a(%)
5
DomaCom 4/27 Crombie Avenue Bundall QLD 4217 Australia
26.81 3 y p.a(%)
