Superannuation Update July 2007 — Freehills Update

IPEBLA Conference

Peggy Haines, Partner of the Melbourne Superannuation group, has recently returned from the IPEBLA Conference 2007 in Seville, Spain, where she led two workshops on conflicts of interest.

In presenting the Australian experience, Peggy focused on the fact that under Australian legislation, fund members and regulators expect superannuation trustees to identify conflicts of interest and to have processes in place for handling those conflicts.

Interestingly, Peggy has reported back that Australia is the only country in the world which requires all superannuation fund trustees to be licensed. The superannuation and pensions experts from around the world were interested in Australia’s compulsory superannuation and licensing and regulatory framework which is seen as one of the premier examples of prudential regulation and fund security in the world’s retirement income systems.

Review of Prudential Decisions

Terry Bridgen, Peggy Haines and Andrej Kocis of Freehills have been involved in preparing the response to Treasury to the Consultation Paper—Review of Prudential Decisions dated 31 May 2007 on behalf of the Corporations Law Committee of the Business Law Section and the Superannuation Committee of the Legal Practice Section of the Law Council of Australia (committee).

The committee supports the Australian Prudential Regulation Authority (APRA) being divested of any power to disqualify individuals, in favour of the Federal Court being awarded such powers. However, the committee has also submitted that section 120A of SIS be examined in the light of the following issues:

• section 120A was originally intended to be used only as a mechanism to support APRA’s power to remove an unscrupulous trustee company in the interests of the public, as evidenced by the need to obtain ministerial consent. APRA has, in practice, extended the application of section 120A beyond that original intent
• section 120A is now being interpreted as allowing disqualification of a responsible officer even though he or she may individually remain fit and proper.

The committee has recommended that the ‘fitness and propriety’ standard under section 120A and under the RSE licensing provisions should be assessed against consistent criteria.

For more information please contact

Name : Terry Brigden
Title : Partner
Office : Sydney
Phone : +61 2 9225 5535
Fax : +61 2 9322 4000
Email : terry.brigden@freehills.com

Name : David Cooper
Title : Partner
Office : Sydney
Phone : +61 2 9225 5392
Fax : +61 2 9322 4000
Email : david.cooper@freehills.com

Name : Natalie Gullifer
Title : Partner
Office : Melbourne
Phone : +61 3 9288 1497
Fax : +61 3 9288 1567
Email : natalie.gullifer@freehills.com

Name : Peggy Haines
Title : Partner
Office : Melbourne
Phone : +61 3 9288 1464
Fax : +61 3 9288 1567
Email : peggy.haines@freehills.com

Name : Andrew Shearwood
Title : Partner
Office : Perth
Phone : +61 8 9211 7509
Fax : +61 8 9211 7878
Email : andrew.shearwood@freehills.com

Name : Michael Vrisakis
Title : Partner
Office : Sydney
Phone : +61 2 9322 4411
Fax : +61 2 9322 4000
Email : michael.vrisakis@freehills.com