How the “Safety Measures” Failed

The High Court of Australia has acknowledged that a persons superannuation entitlement is the most valuable assets most will acquire in heir working lifetimes.

So what are the “Safety Measures” that should protect the members and beneficiaries of superannuation funds and why did they fail.

Access to Deeds

Even though it is a criminal offence to wilfully conceal the original Trust Deed from the members and beneficiaries, ASIC refused to enforce the Corporations Act 2001 and APRA refused to suspend the purported Trustee’s RSE Licence.

The only document ASIC forced a purported Trustee, that had not even been lawfully appointed to the office of Trustee, to disclose was a document that was executed by the well known white-collar criminal Ken Jarrett. An ASIC Officer then dishonestly represent this document as the “Trust Deed” of the fund, when the genuine Trust Deed had been executed some seven decades earlier on the 23 December 1913.

The “Jarrett Deed” is easily proven to be fraudulent simply by counting the number of Directors’ signatures that appear on this purported “Trust Deed”.

It appears that ASIC employs lawyers who are unable to count to ten!

“Equal Representation Rule”

After the Robert Maxwell Pension Fraud in the UK, the Australian Parliament introduced the “equal representation rule” that requires the members of an employee-sponsored superannuation fund to elect an equal number of Directors for the corporate Trustee. However after the last two member-elected Directors resigned in 2010, no further elections were held and the purported Trustee was unable to comply with the “voting rule” that required any Board Resolution to have the agreement of at least two-thirds of the total number of member-elected and employer-nominated Directors. APRA took no notice of repeated complaints over breach of both the equal representation rule and the voting rule.

“Independent” Directors of the Employer-Sponsor

The original Trust Deed was drafted by Sir John Downer who co-drafted the Australian Constitution. The original Trust Deed gave the power to amend the terms of the trust to a majority of the natural person Directors of the sponsoring-Employer. The Elder Smith & Co Limited Provident Funds Act 1963 (SA), then gave the amending power to a majority of the Directors of any “successor company”.

This meant that the “independent” Directors as well as the executive Directors of Elders IXL Limited would have oversight of the employees’ superannuation fund and would be required to execute any Deed of Variation.

However Regulation 50 was simply ignored and fraudulent “Rule 1.13.1″ used as an excuse for not requiring the involvement of the “independent”

“Independent” Fund Auditor

There is no mandated Audit Partner rotation or Audit Firm rotation, so the supposed “Independent” Fund Auditor is captive to the Trustee that appoints him or her. PricewaterhouseCoopers (PwC) simply falsified compliance reports that were then lodged with APRA.

Fund Actuary

The Fund Actuary does not undertake any due diligence when preparing his financial model of the fund – simply a case of “Garbage In – Garbage Out”.

Education of Members

“A fool and his money are soon parted” and the same applies when people are forced to contribute their hard earned money to something they do not understand. No education has been provided by the Government so that members of superannuation funds can protect themselves from the dishonest lawyers and accountants that infect the compulsory superannuation system.

Members of any superannuation fund should always ask for a copy of the original Trust Deed and all amending instruments. If they do not understand these important legal documents, they should take them to their own lawyer.

Access to the Law

The strategy of the dishonest lawyers who infect the compulsory superannuation system is to simply apply the truism that “money buys you justice” in Australia, and so they will just seek to bankrupt any member of the fund that takes legal action, by dragging on any legal proceedings so that the widow who has mortgage her home to try and obtain her survivorship pension will end up losing her home as well as her pension.

No Approval of purported “Successor Fund Transfer”

“Successor Fund Transfer” is a jargon term for the amalgamation of the Trust Estate of one superannuation trust and the legal obligations impressed on that fund with another regulated superannuation trust and associated Trust Estate (fund).

Part 18 of the Superannuation Industry (Supervision) Act 1993 empowers APRA to approve the transfer of all the benefits of member and beneficiaries from one regulated superannuation fund to another.

“The object of this Part is to empower APRA to approve, in certain circumstances, the transfer of all benefits of members and beneficiaries in a regulated superannuation fund or approved deposit fund to another regulated superannuation fund or approved deposit fund.”

If members of one fund are forced against their will to be transferred to another fund not of their choosing, then the Regulator APRA is required to give formal approval pursuant to Section 146 of the Superannuation Industry (Supervision) Act 1993.

Section 146 provides:

“APRA may approve the transfer of all benefits of members and beneficiaries in the transferor fund to the transferee fund in accordance with an application under section 145 if, and only if, APRA is satisfied that:

…………. (b) the transfer is reasonable in all the circumstances, having regard to: (i) the benefit entitlements of members and beneficiaries under the governing rules of the transferor fund;”

The “governing rules” of a fund includes the original Trust Deed and all valid Deeds of Variation

.

These important legal documents were never submitted to APRA as required by Section 145. No “approved form” was submitted to APRA either.

APRA can only approve the transfer of members against their will “if and only if”, the members entitlements under the governing rules of the transferor fund are protected.

Regulators

The previous Chairman of ASIC, Tony D’Aloisio, had an undeclared Conflict of Interests having purchased a winery from a receiver when he was the Chairman of ASIC in breach of the APS Code of Conduct and then failed to declare his direct pecuniary interest to two responsible ministers in breach of Section 123 of the ASIC Act 2001. The former Chairman was never going to investigate allegations of criminal conduct associated with the employees’ superannuation fund of Australia’s Largest Wine Maker and Distributor. Do disciplinary action was ever taken against the former Chairman.

The “Regulators” are under no legal obligation to investigate any allegation of misconduct and so they just “cherry pick” easy complaints that do not involve the “Big End of Town” financial institutions. Both ASIC and APRA are classic cases of “Regulatory Capture”.

A decision made by ASIC or APRA not to investigate is not a decision that can be appealed to the Administrative Complaints Tribunal.

Both agencies are designed for corruption. Neither agency has the oversight of an Integrity Commissioner to investigate corrupt conduct.

ASIC can send a dishonest director or trader to prison, however no one has the power to send a dishonest ASIC officer to prison.

Both ASIC and APRA should be wound up.


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