The Australian Prudential Regulation Authority (APRA) has sent a strong message to employers that they need to clearly separate their business and superannuation interests with the successful prosecution of a trustee in the Federal Court this week.
The former trustee of the Tunstall Bond Superannuation Fund was fined $100,000 for a breach of the Superannuation Industry (Supervision) Act (SIS Act) relating to the transfer of company assets to the superannuation fund in lieu of making superannuation guarantee payments for its employees.
It was alleged in the court that the effect of the arrangement was to allow Tunstall Bond Pty Ltd to keep and use for its own purposes, money that should have been for the benefit of the fund members.
APRA made application to the Federal Court seeking civil penalties against the sole director of the jewellery manufacturer, Tunstall Bond Pty Ltd, Sarkis Derstepanian who, with his wife, Margaret Derstepanian, were former trustees of Tunstall Bond Superannuation Fund.
As a result of the APRA action, the Derstepanians agreed to pay compensation to fund members of over $225,000, and a further $70,000 to the Australian Tax Office on behalf of the fund for breaching the so-called arms length dealing rules and sole purposes test of the SIS Act.
Commenting on the outcome of the case, the deputy chairman of APRA, Ross Jones said that APRA was acting vigorously to protect the interests of members of superannuation funds.
“Employers and trustees need to understand that superannuation is meant to provide a retirement benefit for fund members, and should never be used for financing the employer’s business enterprises,” he said.
