Superannuation Trustees Liability Insurance

The continued introduction of legislation relating to superannuation has resulted in a significant increase in the list of responsibilities faced by superannuation trustees. In addition, the compulsory Superannuation Contribution requirements have resulted in an enormous increase in the amount of funds residing in superannuation and retirement trusts that mean increased responsibilities upon the Fund’s trustees.

 

Why do you need cover?

As a superannuation fund trustee, you must act in the best interests of the fund’s beneficiaries. The law requires you to perform your duties honestly and competently. Serious civil penalties can result from a breach of these obligations.

Even the most careful and ethical trustees are at risk. Trustees have legislative and common law duties (including fiduciary duties). They are similar duties to those carried by company directors and officers. Like them, trustees carry personal responsibility not only for their actions but also where they fail to act in certain circumstances.The Superannuation Industry (Supervision) Act (SIS) requires trustees to as an example:

  • To exercise a reasonable degree of care, skill and diligence;
  • Keep the trust fund’s money and other assets separate from the trustees’ or the employer company’s own money and assets, avoiding a conflict of interest
  • To act in the best interests of the beneficiaries,
  • Ensure that the entity can meet current and future liabilities,
  • Not borrow money,
  • Not lend money,
  • Report adverse events to beneficiaries and the regulator within a defined period,
  • Always deal at arm’s length.

The Benefits of Trustees Liability Insurance

Trustees Liability insurance provides protection for the Trustee and the Trust against the cost of claims against its Trustees for losses arising from their Wrongful Acts. Legally it is the Trustee and not the fund that is liable for any legal actions arising from a Wrongful Act, as the fund is not able to be sued because it is not a legal entity. However, the Trustees are provided with an indemnity by the Trust from fund assets, therefore, if an action were brought against a Trustee, the Trust would fund the losses and defence costs. Therefore, Trustees Liability coverage provides for reimbursement of the fund to ensure that the costs of funding a loss or defending an action are not passed on to members.

 

How can claims arise?

Disputes can arise over:

  • Payment of retirement benefits,
  • Claims under life or temporary and permanent disablement policies organised by the trustees,
  • Payment of benefits going to the wrong person, such as a former spouse,
  • Misrepresentation about likely superannuation payouts,
  • Conflicts of interest between the employer company and the fund member, and
  • Transfer of benefits to a new fund when a fund is wound up.

 

What does the Policy cover?

You should look for cover that includes legal liability for wrongful acts in connection with the superannuation fund and includes defence costs. Some policies will include penalties or fines under the SIS Act, Corporations Act or an adverse determination of the Superannuation Complaints Tribunal as a result of unintentional breaches of strict liability provisions.

Then there are extensions such as Crime, replacing or restoring lost or damaged documents, and inclusion of funds acquired prior to the policy period.

Who can help?

Trustees Liability Insurance gives peace of mind to Trustees that in the knowledge that should they be faced with the prospect of litigation or prosecution, they haveprotection for their personal assets and reputation, as well as Members assets remaining intact. We can help you with this.

 An insurance broker's role is to act as your representative and work in your interests, seeking the best cover at the best price for you with their skill, market knowledge and experience. Call a good one.

Call CPR –Experts who will save you

  

Latest News

CPR joins Ausure

We would like to announce to all our Clients, Prospective Clients, Suppliers and Insurers, that Cooper Professional Risks Pty Ltd trading as CPR Insurance Services, will be leaving National Adviser Services Pty Ltd (NAS) and joining Ausure Pty Ltd as a Corporate Authorised Representative from 5 March 2018.

Fundamentally, there is no difference to you, except our Invoices will look a little different, and the Banking details will be in a different name and account number. Everything else at CPR stays the same.

There are a number of reasons we have made this decision, but the primary reason is for what we believe is best for our clients.

read more

Special offer to CPR Insurance clients

Employsure are providing a FREE Business Health Check to all our clients and gives you the opportunity to receive an analysis of the health and safety requirements in your workplace. Also. Employsure  will review your employment agreements as well as your wage rates helping you to avoid workplace claims.

Ordinarily this would cost you at least $1,250 but because you are a CPR Insurance client, it is free!

It involves the following review for you.

SAFECHECK

A specialist Work Health and Safety Consultant will visit your workplace and carry out:

A review of your business’ current work health and safety policies, procedures and systems to identify areas of concern or non-compliance

Following the review, you will receive a report summarising the findings and the health and safety

Status of your workplace

WAGE CHECK

A Wages Adviser will review your rates of pay and produce a Wage Check report.

The review will be conducted against the industrial instrument applicable

A report will be supplied advising if the wages are compliant and what steps to take to achieve compliance

CONTRACT REVIEW

A Document Consultant will review an employment agreement and provide recommendations.

The review will highlight compliance issues with the Fair Work Act 2009 as well as best practice

The report will make recommendations to achieve compliance and provide protection to your business.

This will remove any areas of potential dispute and risk

So what do you have to lose? Contact us on 07 3123 1137 and arrange 

read more