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APRA responds to BUSSQ’s Federal Court challenge
The prudential regulator confirmed it is considering BUSSQ’s Federal Court appeal.
BUSSQ has lodged an appeal against a decision made by the Federal Court on 31 January, which found the trustee should have used the merits review process under the SIS Act over pursuing a judicial review in its challenge against APRA’s August 2024 action.
What BUSSQ was originally protesting in court was APRA’s decision in August last year to impose additional licence conditions on the trustee in response to concerns regarding serious misconduct within the Construction, Forestry and Maritime Employees Union (CFMEU), specifically its move to order a review of its four CFMEU-appointed directors.
At the time, APRA said it imposed additional licence conditions on both BUSSQ and United Super, the trustee for Cbus, to address concerns regarding “fitness and propriety processes and fund expenditure management”.
Citing public allegations of serious misconduct within the CFMEU and subsequent steps taken by governments and the Fair Work Commission, APRA said it “is concerned about the potential impact on trustees”.
Under the additional licence conditions, the trustees were obliged by APRA to review their compliance with the duty to act in the best interests of their members.
“United Super and BUSSQ are each required to engage an independent expert to conduct a review in relation to the requirements under Prudential Standard SPS 520 Fit and Proper and the trustees’ compliance with the duty to act in the best financial interests of beneficiaries of the funds in making expenditure decisions,” the watchdog said in August.
BUSSQ contested these conditions and sought a judicial review, saying they were beyond APRA’s power and lacked clarity. Despite having the option for internal merits review under the SIS Act, BUSSQ opted for a judicial review, challenging both the conditions and their disclosure.
However, the court ruled against BUSSQ in January, deeming it more appropriate for the trustee to pursue a merits review instead of judicial review and resolve the issues more cost-effectively and efficiently.
“That is the course which should have been taken and it is the one which BUSSQ should pursue if it wishes to maintain its assertions as to the invalidity of APRA’s decisions,” Justice Derrington said.
Namely, the court ruled that pursuing merits review would have been the more appropriate course of action and ultimately declined to exercise its discretion for judicial review, advising that the decision-making process should be addressed through the review mechanisms outlined in the SIS Act.
In a statement on Wednesday, responding to BUSSQ’s appeal, APRA said it is “considering” the notice.
“Trustees of superannuation funds are required to act in the best financial interests of their members and to have appropriate processes in place for the assessment of the fitness and propriety of their directors,” APRA said.
“APRA’s decision to impose additional licence conditions in August 2024 was in response to prudential concerns that APRA had identified with BUSSQ’s compliance with these requirements.”
BUSSQ Super has approximately 73,000 members and $6.7 billion in funds under management.
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