Super trustees want safe harbour

One of Australia’s largest industry superannuation funds have argued that super trustees should be allowed a statutory safe harbour, protecting them from the individual investment decisions of members.

In a submission to the Cooper Review into superannuation, UniSuper has argued that existing regulator arrangements are potentially problematic for super trustees.

“In recognition of the exposure of trustees to the unpredictability of member choices and switching patterns, UniSuper contends that Superannuation Industry (Supervision) Act (SIS Act) should provide a statutory safe harbour that protects trustees from claims arising from the investment decisions made by members,” the submission said.

It said that superannuation was increasingly a portal for managing wealth on a tax-effective basis and, in that regard, superannuation products were competing with other managed-fund products (many of which are also structured as trusts).

“Similarly, a member might select an investment option through their superannuation fund and select an identical investment strategy through a non-superannuation product (such as a platform and/or managed fund) and both products might even be offered by the same organisation,” the submission said.

It said that under the current legal regime, the member could potentially have a claim against the trustee of the superannuation product for allowing the member to choose the investment option, whereas the member would have no such claim in relation to the non-superannuation product.

“This is an asymmetry that discriminates against superannuation trustees by exposing them to unfair legal risks,” the Unisuper submission said.