Small superannuation funds that lost money as a result of the collapse of the Commercial Nominees of Australia Limited (CNAL) trustee group will have up to 90 per cent of the losses paid to them through a Federal Government assistance package, according to the Assistant Treasurer, Helen Coonan.
The Government will provide financial assistance to the 181 small super funds that invested their members’ money in CNAL’s Enhanced Cash Management Trust (ECMT), which had its assets frozen in November last year after the fund lost $25 million in a series of failed investments.
“I have found that the losses to these funds from their exposure to the ECMT have arisen as a consequence of fraudulent conduct or theft,” says Coonan.
However, Shadow Minister for Retirement Incomes and Savings Senator Nick Sherry describes Coonan’s announcement as “a slap in the face to the hundreds of people who have waited more than 12 months for a decision”. He says the current law provides for 100 per cent of the eligible loss suffered by a superannuation fund in the case of theft or fraud.
According to Coonan, the compensation of 90 per cent represents a 10 per cent rise on the figure which was previously allotted for government assistance in such circumstances. But Sherry says Coonan fails to reveal that the Liberal Government attempted to legislate to reduce compensation to 80 per cent of losses.
