The Australian Prudential Regulation Authority (APRA) has obtained an undertaking from the three trustees of the Media Labs Superannuation Fund that will protect the members of the fund pending the rollout of their benefits and the winding up of the fund. The Media Labs Fund has 58 members and assets of $72,000.

Les Phelps, APRA Executive General Manager, said, "APRA identified issues involving the investment strategy adopted by the trustees, the nature of and liquidity of fund assets, and whether the employer- sponsor dealings with the trustees were on an arms-length basis. A major asset of the fund was specialised recording equipment leased to the employer sponsor. In the light of these concerns, APRA took action, the outcome of which was an acceptance by APRA of the enforceable undertaking from the trustees of the fund."

The undertaking provides for the trustees to sell the specialised equipment by 15 December 2001, recover all unpaid rent, and call a meeting of members to advise them of the closure of the fund. Once the accounts and APRA returns are brought up to date, the trustees will wind up the fund and transfer members to a successor fund. The cost of the rectification is to be borne by the trustees and not charged to the members.

The trustees further undertake that they will not act as responsible officers of any APRA-regulated entity for a period of three years from the date of windup of the fund.

The giving of the undertaking by the trustees does not constitute an admission of any wrongdoing on their part.

Mr Phelps said, "This is the first time that APRA has accepted an enforceable undertaking from a trustee. The power to accept one was only introduced to the superannuation legislation early this year. Undertakings can provide an effective tool to enable APRA to address prudential concerns in a superannuation fund such as in this case. Undertakings such as this can be enforced via application to the Federal Court."

For more information contact:

Gloria Peterson Public Affairs Manager 02 9210 3385 or 0419 250 286