The Australian Prudential Regulation Authority (APRA) and the Australian Taxation Office (ATO) on 13 May issued a media release confirming that the investment of superannuation fund monies in particular schemes is inconsistent with the `sole purpose test' for regulated funds.
The particular schemes that fail the test offer non-superannuation shareholder benefits and the cost of the scheme is borne by the fund.
In the case of trustees that offered Coles Myer Discount Card shares as an investment option and participated in a scheme whereby members were provided with the relevant discount card, APRA and the ATO will take no action provided trustees agree that they will not participate in any future scheme:
- by which an advantage or benefit (not being a superannuation benefit within the meaning of the SIS legislation) is conferred on a beneficiary of the fund of which they are trustee or on any other party; and
- where there is an identifiable cost to the fund arising from the conferring of the advantage or benefit, whether a direct charge or an indirect cost such as the foregoing of income which would otherwise be derived by the fund.
APRA and ATO would accept the assurance if it is included as part of trustee minutes in the course of documenting trustee decisions, and would refrain from taking action against the trustee on that basis. It would not be necessary for the concerned fund to seek specific ‘no action’ letters from APRA / ATO. This treatment would only apply to past breaches of the kind described above.