The Australian Prudential Regulation Authority (APRA) today announced that it has suspended HOST-PLUS Pty Ltd from acting as trustee of the HOST-PLUS Superannuation Fund for a period of 120 days.

APRA has concluded that the trustee could no longer be relied on to perform its duties in the manner required under the Superannuation (Industry) Supervision Act 1993 (the SIS Act) and has also revoked the approval of the Funds trustee, HOST-PLUS Pty Ltd, to act as an approved trustee.

The action was taken following a long-running boardroom stalemate, which culminated in the resignation of the employer representative directors on 3 March. Under the Funds governing rules, the resignations resulted in the board no longer being able to form a quorum to make decisions on behalf of the Fund. The six employer and six member representative directors are appointed by the Australian Hotels Association (AHA) and the Australian Liquor, Hospitality and Miscellaneous Workers Union respectively.

To ensure that the day-to-day business of the Fund continues with as little disruption as possible to members, the regulator today appointed Ernst & Young Superannuation Nominees No 1 Pty Ltd as acting trustee of HOST-PLUS. Ernst & Young Superannuation Nominees No 1 Pty Ltd is a firm associated with the major accountancy practice, Ernst & Young.

APRAs Executive General Manager, Mr Brandon Khoo, said that the resignations by the employer representatives rendered the trustee incapable of making decisions on behalf of fund members.

The suspension of the trustee and appointment of an acting trustee were necessary to safeguard members, he said. Members can be assured that their fund assets are held under custodian arrangement and are not at risk as a result of the changed trustee arrangements.

If the suspended trustee wishes to resume operating the Fund following the suspension period, it would be required to make a new application to become an approved trustee.

The application, if made, would be assessed as any other application for approval as a trustee under the SIS Act and would include consideration of the resources available to the trustee, its structure and the fitness and propriety of proposed directors, Mr Khoo said. An industry fund should be managed by its employers and members; however, we would need to be confident that this trustee would not cause any future breakdown in operations and its structure would require significant reform to ensure this.

APRAs actions were taken with the consent under the legislation of Senator Helen Coonan, Minister for Revenue and Assistant Treasurer.

HOST-PLUS has 500,000 members employed in the hospitality and tourism industry and has more than $1.8 billion under management.