AXA Australia will pay an extra $10 million to members of its staff superannuation fund, after complaints from employees lead to an investigation by both the Australian Securities and Investments Commission (ASIC) and the Australian Prudential Regulation Authority (APRA).
The trustee of the AXA Australia Staff Superannuation Plan has agreed to provide an enforceable undertaking to both the APRA and ASIC to adjust the interest rate on member benefits and undertake an employer buy-out of future pension entitlements.
Both ASIC and APRA announced late yesterday that the fund had provided the enforceable undertakings following its own investigations and investigations by the two regulators into the affairs of the fund.
The enforceable undertakings will see the trustee reinstating an earlier method of calculating interest on members’ superannuation, offer certain former members the opportunity to re-enter the fund on actuarially-determined terms, and provide disclosure to members of both these decisions.
APRA said that the restoration meant the superannuation benefits of more than 2,000 current and former members of the AXA Australia Staff Superannuation plan would be adjusted upwards.
However, just 288 deferred benefits members, have been awarded the majority of the increase, sharing $9.2 million of the pay-out.
The investigations by APRA and ASIC had followed complaints by some members and concerns by the regulators about the prudential and disclosure aspects of a decision in 2002 to change the method of calculating the interest rate on termination benefits left in the fund from a ‘smoothed’ rate to an actual earnings rate.
APRA said there was also concern that the trustee had not given members of the fund all the information they needed to make an informed decision about whether to accept an offer made by the employer to members in April, 2003.
The deputy chairman of APRA, Ross Jones, said the regulator welcomed the trustee’s decision to address its concerns.
“The right outcome has been achieved for members,” he said.
Axa, one of Australia’s largest providers of superannuation products, will pay out about $10million in benefits to aggrieved members of its own staff superannuation fund following an investigation by two financial regulators.
