Superannuation funds and their executives who are found to have failed in their duties under the Government’s proposed new Financial Accountability Regime (FAR) will not be able to rely on members’ funds to bail them out.
That will be one of the key bottom lines of the Government’ proposed new Financial Accountability Regime (FAR) with exposure draft reveal that superannuation fund licensees will be prohibited form using trust assets to pay a civil penalty arising from breaching an obligation under the FAR.
What is more, it is unclear the degree to which superannuation funds or other financial services businesses will be able to insure against such eventualities.
The maximum penalties under the FAR are significant with the Financial Services Council (FSC) noting that the penalties are to be the greater of:
Responding to a discussion paper on the new FAR, the FSC said that, “interestingly, in the case of RSE [superannuation] licensees, it is noted that RSE licensees will be prohibited from using trust assets to pay a civil penalty arising from breaching an obligation under the FAR”.
It said that provision would be made for the court to have regard to the impact of the penalty on the trustee’s superannuation fund membership.
Future Group is set to take on nearly $1 billion in funds under management (FUM) and welcome more than 100,000 new members following two significant successor fund transfers.
Insignia’s Master Trust business suffered a 1.9 per cent dip in FUA in the third quarter, amid total net outflows of $1.8 billion.
While the Liberal senator has accused super funds of locking everyday Australians out of the housing market, industry advocates say the Coalition’s policy would only push home ownership further out of reach.
Australia’s largest superannuation fund has confirmed all members who had funds stolen during the recent cyber fraud crime have been reimbursed.