The funds used for the purchase came from the Bendigo Defined Benefit Reserve Account. Defined benefit account members receive fixed payments for life and are typically retired.
A spokesperson for Bendigo Bank said it was aware of the situation and would continue to monitor “appropriateness of our arrangements for staff super in the ordinary course of business”.
Papers signed by IOOF’s general counsel Gary Riordan reveal the firm resolved to replenish the reserves of Bendigo and Adelaide Bank’s Staff super fund with a $180,000 payment it describes as a “good value claim”, which will be “funded from IIML’s corporate account”.
At the same meeting it resolved to replenish the reserves of the IOOF Portfolio Service Superannuation Fund (IPDS), which were drawn down to resolve the Questor incident by $95,962 plus interest.
The reserves of the IPDS were used to plug the gap following a debacle with a cash management trust that started with an overpayment of $6.1 million, continued with a series of underpayments and ultimately led the firm to use the fund’s reserves to square the books.
The sequence of events were explored in depth at the Hayne royal commission where IOOF’s Mr Kelaher argued that the reserve belonged to the trust and not the members of the fund.
APRA was infuriated by Mr Kelaher’s appearance and wrote to the company on September 4 saying it had concerns with its ability to manage conflicts and protect beneficiaries.
“Mr Kelaher seemed to demonstrate a failure to understand the covenants under the SIS Act and the obligations of a trustee under trust law,” the letter said.
APRA demanded IOOF review the Questor matter and any other matter where “the general reserve was used to compensate superannuation members for errors made by a service provider” going back to January 2015.
Despite claims from IOOF that it was doing everything it could to meet its obligations, APRA launched court action against the company and its executives for not being “fit and proper” superannuation trustees on December 7.
The matter will return to court for a directions hearing on March 19 after a case management hearing in late December. Mr Kelaher and chairman George Vernados have stepped aside on full pay until the matter is resolved.
Records show that the administrative error took place in June 2015 and the assets involved were units in Mercer’s growth fund. They do not reveal when the issue was identified nor the date the units were repurchased.
The origins of the Questor debacle go all the way back to the original overdistribution in 2009, however it was not reported to the regulator until 2012.
Shares in IOOF fell steadily during calendar 2018 from a high of $11.36 in January to a low of $4.20 in December. They have since rebounded and added another 6c, or 1.1 per cent, to close at $5.73 on Tuesday.
from Just News Viral http://bit.ly/2AX59Ci
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