Case update - Supreme Court of NSW decision regarding TDP benifit
On 10 October 2018, Justice Hallen of the Supreme Court of New South Wales handed down judgement in the case Folmer v VicSuper Pty Ltd & Anor  NSWSC 1503.
The case concerned a disputed claim for an insured total and permanent disablement benefit by a member of the Victorian Superannuation Fund. Although the proceedings were commenced against both the trustee of the fund and the insurer (being the issuer of the fund's group life insurance policy), the case against the trustee was ultimately abandoned during the trial. The plaintiff alleged that the insurer had breached the duties owed to the plaintiff and that the plaintiff was totally and permanently disabled within the meaning of the relevant policy.
Justice Hallen ultimately found that for the plaintiff, holding that the insurer's decision to decline the claim was vitiated for a number of reasons and that the plaintiff was totally and permanently disabled within the meaning of the policy.
Policy - Productivity Commission releases Supplementary Paper
On 19 October 2018, the Productivity Commission announced the release of its Supplementary Paper - Fiscal impacts of insurance in superannuation.
The paper is part of the Productivity Commission's review into the efficiency and competitiveness of the superannuation industry, as commissioned by the Federal Government. It is the third supplementary paper issued by the Commission following the release in May 2018 of the Commission's draft report, Superannuation: Assessing Efficiency and Competitiveness, and will inform the Commission's final report to be handed to Government by the end of 2018.
The paper reports on the findings of the Commission's financial modelling in relation to the fiscal impacts of insurance in superannuation across an individual's lifetime. The Commission's modelling suggests that the fiscal cost of insurance from increased Age Pension payments (arising from the erosion of superannuation balances) is likely to be material for some cohorts of members, which casts doubts on earlier estimates undertaken by others of a net fiscal benefit of insurance in superannuation. However the paper also points out that net fiscal impacts are only one component of a broader assessment of the total net benefits of insurance in superannuation.
Treasury - Exposure draft Bill and Regulations
On 22 October 2018, Treasury released an exposure draft Bill and Regulations, together with supporting explanatory materials. The draft Bill and Regulations cover proposed miscellaneous amendments to the Treasury portfolio laws, including some very minor changes relating to superannuation legislation.
Submissions are open until 2 November 2018.
Treasury - Exposure draft Regulations
On 23 October 2018, Treasury released exposure draft Regulations in connection with the Corporations Amendment (Design and Distribution Obligations and Product Intervention Powers) Bill 2018, which is presently before the Senate Economics Legislation Committee.
In relation to superannuation, once the Bill is passed the proposed Regulations provide that the provisions of the Superannuation Industry (Supervision) Act 1993 (Act) (which will require target market determinations for financial products) will not apply to an interest in an eligible rollover fund (within the meaning of the Act) or a defined benefit interest (within the meaning of the Superannuation Industry (Supervision) Regulations 1994).
Submissions are open until 13 November 2018.
Case update - Federal Court decision regarding Superannuation Complaints Tribunal determination
On 23 October 2018 Justice Robertson of the Federal Court handed down judgement in the case Bullivant v Australian Meat Industry Superannuation Pty Ltd  FCA 1588.
This was an appeal from a determination of the Superannuation Complaints Tribunal (Tribunal). The Tribunal determined that a decision of the trustee of the Australian Meat Industry Superannuation Trust, in relation to the distribution of a death benefit in respect of a former member, was unfair and unreasonable, and that the trustee's decision should be set aside and substituted with the Tribunal's own determination as to the distribution of the death benefit between various beneficiaries.
The applicant in the proceedings, who was in a de facto relationship with the deceased, sought to set aside the determination of the Tribunal on the basis that the Tribunal committed certain errors of law. Justice Robertson ultimately upheld the applicant's appeal, finding that the Tribunal had committed errors of law, and remitted the matter to the Tribunal to be determined again.
The errors of law that Justice Robertson found had been committed by the Tribunal included that the Tribunal "misconstrued its jurisdiction by proceeding on the basis that a lack of procedural fairness of itself made the trustee's decision to pay the benefit to the deceased's legal personal representative unfair and unreasonable…whereas the Tribunal's consideration of whether a trustee decision was 'fair and reasonable' in the circumstances is to be based on the actual decision, not the process which led to the decision".
The judge also found that the Tribunal's failure to make a key finding of fact (that is, whether the applicant owed money to the deceased at the time of his death) amounted to the Tribunal as a "failure to complete its task". On this point the judge held that "The Tribunal's task was to consider the fairness and reasonableness of the trustee's decision by reference to the practical operation of that decision and the Tribunal could not do so without making a finding on the issue whether the applicant still owed the debt to the deceased at the time of his death".