Key SCT decision impacts amalgamations

Amid continuing debate over superannuation fund amalgamations, the Superannuation Complaints Tribunal (SCT) has handed down a decision impacting successor fund transfer arrangements.

The SCT decision suggests that those running successor funds in amalgamation processes will need to be careful to ensure they do not disadvantage members via higher fee regimes.

The Tribunal has ordered a successor superannuation fund to refund fees to a member which were charged in excess of those which he would have paid in his pre-existing fund.

The Tribunal took the view that the superannuation fund member who had complained to the SCT had been subjected to increased fees in the new fund, which affected his benefit, and the transfer did not meet the requirements of the Superannuation Industry (Supervision) Act (SIS Act) in relation to successor fund transfers.

It ordered that the trustee was, therefore, required to refund to the member the fees that exceeded the fees that would have applied in the former fund and to pay interest on the outstanding amount.

The SCT decision noted that the superannuation fund member had complained to the trustee of the successor fund about the higher fees, but that his complaint had been rejected.

The Tribunal determined that it was not satisfied that the Trustee’s decision to reject the Complainant’s complaint was fair and reasonable.

The SCT set aside the decision of the Trustee and substituted a decision that the Trustee “compromise the Complainant’s complaint by refunding the fees that were debited to his account in the Fund that exceeded the fees that would have been debited to his account if he had remained a member of the Former Fund in the same investment option in which his benefit was invested in that fund immediately prior to the successor fund transfer”.