Industry superannuation fund REST has filed a breach report with the Australian Securities and Investments Commission (ASIC) stating it may have breached the Superannuation Industry (Supervision) Act over its handling of group insurance.
The superannuation fund made the admission after appearing before the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry with counsel assisting the commission, Mark Costello suggesting that it was open for the Commissioner, Kenneth Hayne, to find the fund may have engaged in misconduct.
Costello said the misconduct involved REST continuing to deduct insurance premiums when a person was no longer covered by insurance.
“[This] may constitute a failure to perform the trustee’s duties and exercise the trustee’s powers in the best interests of the beneficiaries as required by section 52C of the Superannuation Industry (Supervision) Act,” he said.
The naming of REST with respect to misconduct came amid scathing assessments of the conduct of major life insurers including TAL, AMP Limited, Clearview and CommInsure.
The REST breach report to ASIC dealt with an uninentional breach of section of the SIS Act, which requires trustees to provide reasons for a decision in response to a complaint abut the proosed payment of a death benefit.
REST has pointed out that the matter was not raised during the Royal Commission proceedings.
Comments
What no media storm and outrage? We can overlook sponsorship of stadiums and rugby teams, we can overlook corporate boxes funded by the funds "only to benefit members" while union heavy weights sup on prawn sandwiches and champagne We aren't concerned some group policies in ISA are lower quality and more expensive than full commission retail policies for the same cover, we aren't concerned about calling a 88/12 fund a "balanced" fund (this has to breach s52 of the NSW Trade Practices Act - misleading and deceptive conduct). Whilst on the topic of s52 - compare the pair, one has no service, the other does (ratbag banks excluded), there is is very little in the way of an "average balanced retail fund" and yet they are equated as equals - much like an apple and watermelon are equals.
Lastly on s52 and we aren't concerned when property is classified as a "defensive asset", surely this confuses or misleads the less than well educated in financial affairs when trying to make a decision about their financial future?
I am not for one second defending what has come out at the RC, it's not pleasant and it has to be done. It is just BEYOND MY COMPREHENSION that the union funds get away unscathed. Imagine if it was CBA or other bank charging for insurance premiums for no insurance, they'd be screaming from the rooftops.
Can we just have a fair and equal approach please? Yes yes I know, there goes a flock of flying pigs.
take a look at this report which was done back in 2015 from PWC talking about how they are getting away with it along with the research houses. Crazy how they haven't broken any recent laws which have now been passed??? www.pwc.com.au/consulting/assets/publications/comparing-super-funds-15.pdf
Totally agree Wildcat. There is something dodgy about how ASIC and RC have handled this and essentially ignored any wrongful advice or client related issues for a $8 trillion segment of the super pool. Maybe they are completely and totally without flaw, like the propaganda they peddle on their multi million dollar TV ad's?
ASIC and RC did not know about the issue. REST only just reported it.
Talking about how ASIC & RC handled all ISA matters in general.
Almost as dodgy as the ISA funds themselves.
And all the other misbehaviour that was known???
Hostplus currently has 0% exposure to cash and 0% exposure to Fixed interest and yet their largest fund is called "Balanced". Alternative Assets, Property and infrastructure are classified as Defensive. When you adjust their returns for this level of risk their performance is sub standard. Would a reasonable person expect the definition of "balance" to fit this? How is this in line with their obligations to do all things necessary to ensure that the services covered by the respective licence are provided “efficiently, honestly and fairly”: Section 912(1)(a) Corporations Act ? Performance issue aside even if they are doing well is this honest and ethical behavior. I don't think so.
Anne, very good question. Now, who do we get to listen? ASIC does not see any issue with Industry Funds.
I couldn't agree with you more Wildcat! I can't believe the Royal Commission didn't take them to task...
I love the picture for this article. Well chosen. Justice with a blindfold over her eyes! You have made my day
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