Frequently Asked Questions

Question 1

Isn’t my superannuation benefit paid by CUB or Foster’s? I left CUB (or Elders) years ago.

A superannuation benefit is not paid by CUB or Foster’s. The benefit is paid from a Trust Fund that is not legally part of CUB or Foster’s. The assets of the fund are held on trust for the members and beneficiaries of the Fund. The sponsoring Employer has a legal obligation to ensure the solvency of the Fund, however the obligation to pay the correct benefits to the correct beneficiaries lies with the Trustee or Trustees of the Fund. Ownership of the assets is jointly held by the Trustee and the Members and beneficiaries and not by the Employer.

A person can remain a member of an employer-sponsored superannuation fund long after their contract of employment has been terminated or they have retired.

Question 2

Can’t CUB or Foster’s Just Tell the Trustee what to do?

A trustee has a legal obligation to obey the terms of the trust {Regulations of the Fund} and cannot act under the dictation of third parties including the sponsoring Employer.

If the sponsoring Employer wishes to alter benefits to existing members of the fund, then changes must be incorporated into a properly executed Deed of Variation (or Amending Deed) before the trustee can legally act on the changes. If any changes reduced the benefits of existing members or beneficiaries, without the informed consent of the members and beneficiaries, a Court would rule any such changes as fraudulent and ineffective.

Question 3

Superannuation appears very complex to me can a simple explanation be provided?

A benefit provided under a Defined Benefit superannuation fund is similar to a benefit that a person receives as a beneficiary of a will. In the case of a will, the Executor, has the legal duty to distribute assets of the deceased estate among the beneficiaries nominated in the will which is a legal document. If the Executor has any concerns about how to interpret the will, the Executor has the right to obtain directions from the Court and the cost is taken out of the deceased estate and not out of the Executor’s own pocket. This will protect the Executor if any disgruntled beneficiaries then seek to sue the Executor.

A Defined Benefit fund operates on similar principles, except there is an ongoing distribution of assets from the fund and a class of beneficiaries are specified in the Trust Deed instead of being named individually. Their names are recorded in a separate Register once they have become members of the Fund.

Because a superannuation fund can last for many decades, the original Trust Deed can be subject to many amendments. However all the amendments have to be made lawfully in accordance with well established principles of law.

If the Trustee or Trustees have any doubts about how to interpret the original Trust Deed and all the subsequent amending Deeds, just as an Executor, they have a right to seek directions from the Court.

By obtaining guidance from the Court, the Trustee or Trustee will be protected by the Court against any subsequent claims for the members and beneficiaries for not paying benefits in accordance with the terms of the trust {Regulations of the Fund}.

The estate of a member of a superannuation fund has a claim if the member and other dependants do not receive their full entitlement under the Trust Deed as lawfully amended during their lifetime.

Question 4

Aren’t Superannuation Funds subject to Government Regulation?

The public servant regulators are subject to “Regulator Capture”, by the industry they are supposed to regulate. Junior lawyers start their careers as lowly paid public servants at ASIC and APRA and then leave once they have gained experience and connections to take jobs in the legal departments of the major banks and insurance companies at double or triple their public service salaries.

It is therefore a “career limiting move” for any public servant at ASIC or APRA to investigate serious complaints about the maladministration of any superannuation fund administered by the major banks.

Question 5

What about the “Equal Representation Rule”?

After Robert Maxwell and his sons “misappropriate” £454 million from the pension funds of the employees of the Mirror Newspaper Group benefit in the UK in the early 1990s, the Australian Government introduced the “equal representation rule”, requiring the members of a fund to elect and equal number of Directors to the Board of the corporate Trustee of a superannuation fund as are appointed by the sponsoring Employer.

If a member-elected Director reigns the position must be filled with 90 days.

However the last Member-elected Directors of the fund once know as the Elders IXL Superannuation Fund resigned in 2010 and they have never been replaced. The Prudential Regulator – APRA has simply ignored repeated complaints over the lack of any Member representation and protection.


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This tab updated on 19 June 2015