Funds burnt by CNA collapse earn Govt payout
Small superannuation funds that lost money as a result of the collapse of the Commercial Nominees of Australia (CNA) trustee group will have up to 90 per cent of the losses paid to them through a Federal Government assistance package, the assistant treasurer, Helen Coonan, announced on Friday.
The Government will be provide the financial assistance to the 181 small super funds which invested their members’ money in CNA's Enhanced Cash Management Trust (ECMT), which had its assets frozen in November last year after the fund lost $25 million in a series of failed investments.
“I have found that the losses to these funds from their exposure to the ECMT have arisen as a consequence of fraudulent conduct or theft,” Coonan says.
She says the Government’s decision to provide assistance to members who lost considerable amounts of their retirement savings in the collapse of the fund was made with regard to the public interest.
However, hypothetical investment returns that may have been achieved since the time that assets were frozen in November last year will not be covered in the assistant package.
Fees which were charged by the replacement trustee will be covered, Connan says.
The payment to investors of 90 per cent of their lost funds represents a 10 per cent increase on the figure which was previously allotted for Government assistance in such circumstances, which dated back to the 1997 Financial Sector Inquiry, according to Coonan.
Coonan says the superannuation industry has agreed to pay a levy that will allow the Government to offer similar assistance to investors in similar circumstances in the future.
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