The trustee of the AXA Australia Staff Superannuation Plan has agreed to provide an enforceable undertaking to both the Australian Prudential Regulation Authority (APRA) and the Australian Securities and Investments Commission (ASIC) over a proposal to adjust the interest rate on member benefits and undertake an employer buy-out of future pension entitlements.
Both ASIC and APRA announced late yesterday that the trustee had provided the enforceable undertakings following its own investigations and investigations by the two regulators into the affairs of the fund.
The enforceable undertakings will see the trustee reinstating the earlier method of calculating interest on members’ superannuation, offer certain former members the opportunity to re-enter the fund on actuarially-determined terms, and provide disclosure to members of both these decisions.
APRA said that the restoration meant the superannuation benefits of more than 2,000 current and former members of the AXA Australia Staff Superannuation plan would be adjusted upwards with an estimated $9.2 million of the aggregate total to go to 288 deferred benefits members.
It said the investigations by APRA and ASIC had followed complaints by some members and concerns by the regulators about the prudential and disclosure aspects of a decision in 2002 to change the method of calculating the interest rate on termination benefits left in the fund from a ‘smoothed’ rate to an actual earnings rate.
APRA said there was also concern that the trustee had not given members of the fund all the information they needed to make an informed decision about whether to accept an offer made by the employer to members in April, 2003.
The deputy chairman of APRA, Ross Jones said the regulator welcomed the trustee’s decision to address its concerns.
“The right outcome has been achieved for members,” he said.
