A court of law rather than a superannuation fund trustee would be best placed to determine whether a fund member was seeking to use superannuation contributions to circumvent criminal compensation arrangements, according to the Association of Superannuation Funds of Australia (ASFA).
In a submission to Treasury responding to the review of superannuation and victims of crime compensation, ASFA has warned that superannuation funds are likely to encounter significant legal impediments to dealing with “out of character” contributions by members seeking to shield assets from victims of crime.
“We agree with the proposal that the process for disclosure of a perpetrator’s assets should originate from a criminal or civil court proceedings, to balance efficacy of proceedings with appropriate oversight and privacy implications,” the ASFA submission said.
“We support this being done in conjunction with the ATO, who would build a new, secure, electronic system to give courts visibility of superannuation information held by it. This system should be developed in consultation with the superannuation industry, the courts and other stakeholders,” it said.
However, ASFA said it should not be left to superannuation funds to determine whether a member’s contributions were out of character and therefore available for compensation, with such arrangements being better left in the hands of the courts.
“… this would be appropriate to be performed by a court, exercising judicial discretion and judgment in all of the evidence and circumstances before it, there would be significant legal and practical issues if a superannuation trustee were to attempt this,” the ASFA submission said.
It said that not only would such an approach conflict with the trustee’s duty to act in the best interest of their members but, from a practical perspective, the trustees only had visibility over contributions made to their fund, not to other superannuation funds.
“In circumstances where a successor fund transfer has taken place, the ‘successor’ trustee is unlikely have records with respect to the contributions made each year to the previous fund,” the submission said.
“Further, the trustee does not have access to any of the member’s other financial information, and so it will be difficult to ascertain whether there is any pattern to the contributions that may, for example, correlate with income.”
