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Super funds distance themselves from PwC
Following PwC’s tax leaks scandal, two of Australia’s mega funds have announced they’ve frozen any new contracts with the firm, while others say they are undertaking reviews of their consultancy relationships.
AustralianSuper, the country’s largest super fund with more than 3.1 million members, came out this week to publicly express its concerns around the scandal, which saw some of PwC’s senior partners misuse government information nine years ago to provide multinational clients with a heads-up on new tax anti-avoidance rules.
Since the news broke last month, its Australian chief executive quit; former head of international tax for PwC Australia and the man at the centre of the scandal, Peter Collins, was under federal investigation; and some nine senior partners were directed to go on leave pending the outcome of the investigation.
“AustralianSuper is concerned with the ongoing revelations around PwC and as a result has frozen any new contracts with PwC,” a spokesperson for the $290 billion fund told Super Review.
Its leadership had expressed these concerns at the highest level to PwC, it said.
“The fund will review its current audit contract with PwC later this year in line with its annual processes,” it said.
Similarly, Australian Retirement Trust, which manages over $240 billion in retirement savings for 2.2 million members, confirmed it would be freezing new contracts with the firm.
“Australian Retirement Trust will continue to assess our engagement of PwC and will not be undertaking any new contracts with PwC at this time,” the fund told Super Review in a written statement.
A third super fund, $72 billion fund HESTA with more than a million members, said it is “engaging directly” with PwC on what had emerged.
“We continually assess service providers and currently restrict consideration of PWC for any new or additional service provision to the Fund,” a spokesperson said.
Aware Super noted that it works with a “variety of professional services firms that provide essential services” that supplement its in-house team, which include all of the big four consulting firms, including PwC from time to time.
“We are working with PwC to satisfy ourselves that none of the tax advisers who have advised Aware Super have been implicated in the current matter, and we are undertaking our own internal review to ensure the best interests of our members are being supported in all of these consultancy relationships,” it said.
Cbus and UniSuper did not have a comment to provide at the moment.
Hostplus told Super Review it would continue to closely monitor and "assess the situation as it evolves."
Earlier this week, John Lonsdale, chair of the Australian Prudential Regulation Authority (APRA), confirmed the prudential regulator had asked PwC for assurance their dealings had not been disclosed to the list of partners or people under scrutiny at the moment.
For the financial year, APRA said it has four contracts with PwC totalling some $500,000, three of which had expired. The remaining contract, for around $140,000, would expire in June.
“The assurance that we received back from PwC was that that is the case — our data, our information and the work that we’ve done with PwC is confined to the people that we’ve been dealing with,” Lonsdale said in an appearance before the Senate economics legislation committee.
“So that is the step that we have taken, and the subsidiary step that I would flag is that we’ve taken very careful note of the Department of Finance circular last week that looks very pointedly at the issue of ethical issues, and I can tell you that our procurement processes are based, effectively, on Commonwealth rules.
“And we will be making sure, as we always do, that where we do procurement we have value for money, we have competition, we have efficiency and ethical processes, we have true accountability and we manage the risk of the procurement actually realising what it says. So, they’re the key pillars we look for.”
The Australian Securities and Investments Commission (ASIC) was also reviewing all its contracts with PwC to “satisfy ourselves that the highest standards of confidentiality are being observed”, ASIC chairman Joe Longo, said at the Australian Financial Review ESG Summit.
AUTHOR
Rhea Nath
Rhea L Nath is a journalist on Super Review and InvestorDaily, with a focus on funds management, superannuation, and institutional investment. Previously, she covered small business and entrepreneurship news at Dynamic Business and multicultural issues at Indian Link Media Group. In 2022, she was named Young Journalist of the Year at the NSW Premier’s Multicultural Communications Awards.
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Any business or government agency that deals with PWC on the basis of confidentiality and trust being respected, from here on, has to be regarded as either mis-managed or completely reckless.