The Australian Prudential Regulation Authority (APRA) acknowledges the decision by the Administrative Appeals Tribunal (AAT) to set aside APRA's disqualifications of seven directors of the former trustee of the AXA Australia Staff Superannuation Plan (the Fund).
APRA has been prevented since June 2005 by confidentiality orders of the AAT from making any public statements in relation to the above disqualifications, its investigation or the matter before the AAT. Those orders were not revoked until 5pm today. When APRA was first taken to the AAT on this matter, it opposed the issuing of any confidentiality orders relating to the case.
While the AAT found that the actions related to an Enforceable Undertaking from the trustee did not warrant disqualifications for the individuals concerned, it did find that the trustee withheld information from a class of fund members and "did so deliberately so that they could not select against the plan" (para 386 of AAT's Reasons for Decision). However, the Tribunal concluded that the trustee's conduct was in the interests of the fund members as a whole. The AAT did not express any criticism of APRA's processes or decisions in respect of the seven individuals.
APRA has decided that, on balance, it will not appeal the decision. APRA will continue to take actions in the interests of superannuation fund members when the circumstances warrant it. APRA will not be making any further comment on this matter and notes that, since entering into an Enforceable Undertaking with APRA, the trusteeship of the fund has been transferred to a new trustee.
Background
The disqualifications that have been set aside related to an investigation into the Fund - following a number of complaints - that resulted in the trustee agreeing to return nearly $10 million in benefits to fund members. On 25 May 2005, APRA and the Australian Securities and Investments Commission (ASIC) announced they had each accepted an Enforceable Undertaking from the trustee of the Fund to restore benefits.
The restoration meant that the superannuation benefits of more than 2,000 then current and former members of the Fund were adjusted upwards, with an estimated $9.2 million of the total returned to 288 'deferred benefits members'. The rectification also included an offer to certain former members to re-enter the Fund on actuarially determined terms.
The Enforceable Undertakings related to decisions by the trustee to change the method of calculating the interest rate on members' benefits with retrospective and detrimental effect, and its transmission of an offer by the employer to buy out future pension entitlements, without adequately informing members. A copy of the AAT decision is made available at the Administrative Appeals Tribunal website.
The Australian Prudential Regulation Authority (APRA) is the prudential regulator of the financial services industry. It oversees banks, credit unions, building societies, general insurance and reinsurance companies, life insurance, friendly societies, and most members of the superannuation industry. APRA is funded largely by the industries that it supervises. It was established on 1 July 1998. APRA currently supervises institutions holding approximately $2.2 trillion in assets for 20 million Australian depositors, policyholders and superannuation fund members.
Media and industry inquiries only:
Stuart Snell, Head of Public Affairs
Australian Prudential Regulation Authority
Telephone: 02 9210 3384
Mobile: 0407 250 276
All other inquiries:
APRA Contact Centre
1300 131 060
