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Super fund trustees must push to lift redemption freezes
Super fund trustees must push for redemption freezes to be lifted in their own interests, according to the Professional Associations Superannuation Fund (PASF).
“Few have questioned whether the responsible entities for theses schemes have correctly applied the procedures required to implement the freezes and, more importantly, whether they had determined that unit holders’ rights would not be affected,” PASF investment manager Paul Kessell said.
“It seems like superannuation funds have accepted that they’re unable to seek redress and must wait patiently until the economic environment recovers before the freezes can be lifted. We simply don’t think this is the case,” he said.
The PASF launched legal action during the year when the responsible entity (RE) of the investment scheme it invested in decided to halt redemptions. The court ruled that the rights of the unit holders had been adversely affected by freezing redemptions and required the RE to process the company’s redemption request.
Kessell said unit holders should review an investment scheme’s constitution to see if the RE took reasonable steps in making modifications to the redemptions regime and seek appropriate legal advice.
Trustees have a duty to closely monitor their investment managers’ activities and act decisively in their members’ interests.
AUTHOR
Mike Taylor
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