Telstra should not be subject to the FAR

TelstraSuper is calling for the Financial Accountability bill to clearly exclude employer sponsors of corporate super funds from the definition of “significant related entity” to avoid Telstra being viewed as a related entity.

In its submission to the Financial Accountability bill, TelstraSuper noted industry commentary around the bill potentially impacting sponsors of corporate superannuation funds by making them accountable to the requirements of the Financial Accountability Regime (FAR).

The corporate superannuation fund said its parent company, Telstra, operated in an entirely separate sector and was not an Australian Prudential Regulation Authority (APRA) regulated entity.

Therefore, it argued, it would be outside the intended scope of the bill if Telstra became subject to the FAR regime.

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It also argued that the degree of interdependency between the trustee and Telstra was limited.

“Telstra has a role in nominating some of the trustee directors, although their appointment is a decision of the trustee,” TelstraSuper said.

“Telstra also has a role in making regular contributions to the fund. However, this only relates to those Fund members who are current Telstra employees.

“Furthermore, the trustee is subject to a covenant to act in the best financial interests of fund members and may not be subject to direction by Telstra in the exercise of its duties.”

TelstraSuper said Telstra was not involved in its day-to-day decision making.

“The trustee operates independently of Telstra in an organisational, financial and administrative sense, aside from Telstra’s role as shareholder and contributing employer,” it said.