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:
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:
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.
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