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.
The $9 billion fund is backing agriculture investor GO.FARM, with its capital already directed towards enhancing two key assets.
Brighter Super is considerably scaling down the investment options it offers members in order to reduce costs.
Amid a challenging market environment, three super fund CIOs have warned against ‘jumping at shadows’.
The professional body is calling for the annual performance test to transition to a two-metric test, so it better aligns with the overarching duty of super fund trustees to act in the best financial interests of their members.
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