AUSTRALIA - The Australian Securities and Investments Commission (ASIC) has accepted an enforceable undertaking from Tower Superannuation after the discovery of a number of administrative errors in the calculation of members' account balances.
An enforceable undertaking is a legal agreement in which a person or organisation undertakes to carry out specific activities to deliver benefits to industry and the broader community.
The errors were made by Tower Risk and Investment Management Limited (TRIM), the fund administrator for Tower Superb Master Trust (Superb), of which Tower Super is the approved trustee.
As part of the undertaking, Tower Super is required to notify and compensate all members affected by the administrative errors and to report to ASIC on these issues. The company is also required to engage an independent compliance consultant to review the compensation methodology to ensure that members will be correctly compensated.
“ASIC accepted the undertaking to ensure that the interests of Superb members were protected and the account balance errors quickly rectified,” the commission said in a statement.
“Tower Super advised ASIC that due to administrative errors by TRIM, distributions from selected investment options, tax credits and other tax concessions received in respect of identified unitised investment managers, and direct shares, were not correctly allocated to members’ accounts. As a result, the capital gains tax payable upon redemption of units in some unitised investment managers and direct shares have not been correctly applied to members’ accounts. Furthermore, some members have also been chard incorrect fees.
ASIC said as a consequence, Superb members might have receive incorrect information concerning account balances and earnings distributed to their account and could have received incorrect payment on redemption or withdrawal from the fund.
Superb was terminated in 2004 and has no current members. Tower Super estimates that the total compensation amount will be AUS$1m.
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