Should super trustees be allowed ‘honest mistakes’?
Superannuation fund trustee directors should not be subject to the same penalties that apply to the directors of Managed Investment Schemes and should be allowed some lee-way with respect to ‘honest mistakes”, according to a key superannuation industry organisation.
The Association of Superannuation funds of Australia (ASFA), has used a submission to the Treasury to argue against the Government’s proposed legislative changes which would see superannuation fund trustee directors held to the same standards of those of MISs.
The submission said that while ASFA noted the intention to strengthen director penalties, it questioned the alignment of superannuation fund director penalties with those of managed investment funds.
“We submit that, given these penalties will be with respect to a breach of the directors’ covenants, there should be statutory defences available which reflect the common law defences,” it said. “Trustees operate in a highly regulated environment very different from that of managed investment schemes.”
The ASFA submission said the legal and regulatory obligations placed on directors of superannuation funds and directors of Managed Investment Schemes were markedly different and that while the Corporations Act 2001 clearly sets out the need for directors of an MIS to protect the interests of investors, the regulatory framework was not as comprehensive as in the equivalent APRA-regulated superannuation trust environment.
“Trustees require appropriate protections,” it said. “We submit that, if there is to be an extension of criminal and civil penalties for superannuation trustees, at a minimum it should include protections similar to those contained in the common law and the Corporations Act 2001, for example for honest mistakes and actions undertaken in good faith.”
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