AUSTRALIA - The AXA Australia Staff Superannuation Plan is to change its method of calculating the interest rate on members' benefits on the back of investigations by the Australian Prudential Regulation Authority (APRA) and the Australian Securities and Investments Commission (ASIC).
The investigations followed complaints by some members and concerns by the regulators over the prudential and disclosure aspects of a decision by the fund in 2002 to change the method of calculating the interest rate on termination benefits left in the fund from a “smoothed” rate to an actual earnings rate.
The change in calculations led to deferred members having -5.8% credited to their accounts for the 2001/2002 financial year and -0.1% credited for 2002/2003 - less than the “smoothed” rates which would have been 3.9% and 2% respectively.
The decision by the trustee to reverse the change will give an aggregate increase in benefits of AUS$10m and is expected to benefit more than 2000 current and former members of the plan.
Ross Jones, APRA deputy chairman welcomed the trustee’s decision to address the concerns raised by the investigations.
ASIC executive director of enforcement, Jan Redfern, added: “Timely disclosure of accurate and relevant information by superannuation trustees is critical, particularly in situations where members are exercising choices based on that information. This is particularly important in an era of superannuation choice.”
APRA and ASIC said they had accepted an enforceable undertaking from the fund’s trustee which will see the trustee reinstate for 2001 and 2002 its earlier method of calculation and offer certain former members the opportunity to re-enter the fund on actuarially-determined terms.
Prior to the investigations, the regulators had also been concerned that the plan’s trustee had not given members all the information they needed to make an informed decision about whether to accept an offer made by the employer to members in April 2003. Some 47 former members accepted the offer by the employer to buy out their future pension entitlement for a 10% supplement to their accrued lump sum benefit.
PwC, KPMG, EY and Deloitte must break up their consultancy and audit businesses into distinct firms to provide greater focus on the "most challenging and objective audits", the competition watchdog has said.
The Department for Work and Pensions (DWP) has released its first batch of guidance setting out how the guaranteed minimum pension (GMP) conversion legislation may be used to resolve unequal payments.
This week's top stories include the government spending £800,000 on a Gogglebox advert and MPs writing to The Pensions Regulator about its engagement with the Railways Pension Scheme.