The Lander & Rogers Superannuation Alert is a brief overview of new developments in the superannuation industry.
- On 5 August 2016, the Federal Court made available its judgement (handed down on 22 July 2016) in Trustees of the Property of Morris (Bankrupt) v Morris (Bankrupt)  FCA 846. In this case, the Court considered whether certain death benefits paid from superannuation funds to a person who had been declared bankrupt were excluded from distribution to creditors under the Bankruptcy Act 1966, which relevantly provides that an "interest of the bankrupt in a regulated superannuation fund" is property that is excluded from distribution to the bankrupts creditors.
The Court held that as soon as the trustees of the funds exercised their respective discretions to pay the bankrupt the relevant death benefits, a proprietary interest in the funds was created so that each was "an interest of the bankrupt in a regulated superannuation fund" for the purposes of the relevant provisions of the Bankruptcy Act 1966, and therefore excluded from distribution to creditors.
- On 8 August 2016, the Minister for Revenue and Financial Services, Kelly O'Dwyer MP, issued a media release outlining the terms of reference for an independent review into the financial system's external dispute resolution and complaints framework. The following bodies will be examined under the review: the Financial Ombudsman Service, the Superannuation Complaints Tribunal and the Credit and Investment Ombudsman. Minister O'Dwyer stated that the terms of reference "allow for comprehensive consideration of the effectiveness of the existing framework, as well as consideration of different models in providing effective avenues for resolving disputes". The independent panel undertaking the review is expected to provide a final report to the Minister by the end of March 2017.
- On 8 August 2016, the Supreme Court of South Australia handed down two judgements in relation to applications made by trustees of superannuation funds to vary the terms of the trust deeds of the relevant funds, under section 59C of the South Australian Trustee Act 1936.
In the first case, Westpac Securities Administration Ltd v Cooper  SASC 122, the trustee of the Westpac Mastertrust Fund sought to vary the terms of the fund's trust deed to empower the trustee to effect a successor fund transfer without the fund members' consent. The Court granted the trustee's application and agreed with the trustee that there were good reasons to vary the terms of the trust deed to allow the trustee to transfer benefits by way of successor fund transfers in certain specified circumstances and subject to particular conditions. Therefore, it found that the variation was ultimately in the interests of members.
The Court also considered whether it had jurisdiction to hear applications of superannuation fund trustees where there is no particular connection between the trust and South Australia, such as the residence of the trustee or the proper law of the trust. However, given that there were 11,000 members of the trust residing South Australia, the Court considered this to be a "real and substantial connection" with South Australia and consequently found that there was no improper purpose in the trustee bringing the application in South Australia.
In the second case, Retail Employees Superannuation Pty Ltd v Pain  SASC 121, the trustee of the Retail Employees Superannuation Trust sought an order varying the fund's trust deed to validate certain previous amendments with prospective effect, which the trustee considered may not have been made in full compliance with the deed's amendment clause. The court granted the order on the basis that it was appropriate to vary the trust deed and that the variations were ultimately in the interests of the members.
In addition, the Court made several observations concerning the nature and statutory requirements for a MySuper product. The Court noted that a trust deed must instil the MySuper class of beneficial interest as a separate and distinct beneficial interest from choice products.
- On 11 August 2016, the Federal Court handed down judgement in Ievers v Superannuation Complaints Tribunal  FCA 936. The case concerned a decision by the trustee of the SunSuper Superannuation Fund to pay a death benefit to the deceased member's legal personal representative (the deceased's mother). That decision was overturned by the Superannuation Complaints Tribunal on application by Mr Hattingh, who contended that because he was a dependant in relation to the deceased he was entitled to be paid the benefit (on the basis that he was the member's de facto spouse, notwithstanding some contention as to whether the relationship had ended in the days before the member's suicide).
The Tribunal agreed with Mr Hattingh and overturned the trustee's decision and replaced it with its own decision to pay the benefit to Mr Hattingh. The Tribunal's determination was appealed to the Federal Court by the deceased's mother, who argued, among other things, that the Tribunal did not have jurisdiction to make a finding that Mr Hattingh was a dependant in relation to the deceased. The Court did not agree and found that the Tribunal did have such jurisdiction in accordance with the powers conferred upon it under the Superannuation (Resolution of Complaints) Act 1993, which included all the powers, obligations and discretions of the trustee.
All information on this site is of a general nature only and is not intended to be relied upon as, nor to be a substitute for, specific legal professional advice. No responsibility for the loss occasioned to any person acting on or refraining from action as a result of any material published can be accepted.