Super Alert – 16 February 2024: Judicial advice in relation to “single trust” deed clause


Posted By and on 16/02/24 at 11:26 AM

Welcome to the latest issue of the KHQ Super Alert. This week the NSW Supreme Court released an interesting judgement relating to the interpretation of a trust deed containing both defined benefits and accumulation interests. APRA and ASIC also published statements made this week to a Senate Committee.

ASIC – Statement to Senate Committee

On 15 February 2024, ASIC published the opening statement delivered by its Chair, Joe Longo, to the Senate Economics Legislation Committee (as part of its additional estimates hearings for 2023/24). Mr Longo advised that ASIC’s Enforcement and Regulatory update for the previous quarter will soon be released and stated that ‘[i]n the last quarter alone [ASIC] commenced over 80 investigations, charged 19 individuals with criminal offences and secured 9 criminal convictions’.

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APRA – Statement to Senate Committee

On 14 February 2024, APRA published the opening statement delivered by its Chair, John Lonsdale, to the Senate Economics Legislation Committee (as part of its additional estimates hearings for 2023/24). Mr Lonsdale informed the Committee that APRA:

  • ‘recently released [the] latest Policy and Supervision Priorities, which provides a six-month view on APRA’s key focus areas for banking, insurance and superannuation…[such as] operational and cyber resilience…[and] lifting superannuation trustees’ practices on retirement incomes, implementing recommendations from the Financial Regulator Assessment Authority (FRAA) review, enhancing transparency and aligning APRA’s heatmaps with the performance test’ (see our Super Alert of 2 February 2024);
  • ‘launched the second phase of [the] Superannuation Data Transformation, which proposes to boost [APRA’s] data collection in areas including trustee board governance and investment liquidity and valuations’; and
  • commenced ‘several enforcement actions, including two relating to poor risk governance and one relating to weak cyber-controls’.

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NSW Supreme Court – Judicial advice in relation to “single trust” deed clause

On 14 February 2024, the NSW Supreme Court published its decision in Re AUSCOAL Superannuation Pty Ltd atf the Mine Superannuation Fund; Application for Judicial Advice [2024] NSWSC 32. The judgement was made on 1 February 2024 but was not immediately released due to a confidentiality order.

The relevant trustee applied to the Federal Court seeking directions on various questions relating to a trust deed provision which provided that the fund is a ‘single trust’. The Court was required to consider whether, despite this clause, the trustee ‘would be justified in administering and managing’ the fund so that ‘assets available to fund defined benefit entitlements [would] be restricted to the assets attributed to the applicable defined benefit Category’ (and vice versa in respect of the accumulation category). The Court affirmed this approach and gave its advice that ‘any benefits payable to a Beneficiary with respect to their defined benefit interest in [the fund] will not be payable from the Assets of [the fund] attributed to Accumulation Member Categories’.

The Court did not consider that the trustee needed to amend the trust deed to clarify this position for the avoidance of doubt.

Click here for details.

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KHQ Lawyers - Sanela Osmanovic

Sanela Osmanovic Senior Associate

Sanela is a Senior Associate in our Superannuation & Financial Services team, and has a broad range of experience working with a range of superannuation fund trustees... Read More

KHQ Lawyers - Natalie Cambrell

Natalie Cambrell Director

Natalie leads our Superannuation & Financial Services team. With more than 25 years’ experience, she has an enviable reputation for her in-depth knowledge in these highly regulated and complex... Read More