Superannuation Guide - Protecting Superannuation
Can the employer use my money?
No. The accumulated money is kept in "trust". This means the money is not legally available for the employer to use. Funds are protected even if the company goes out of business.
The Superannuation Industry (Supervision) Act sets out the responsibilities of trustees. They must:
- act honestly;
- properly invest the money, and do it carefully - trustees are able to take professional advice on this, but the final decision is the trustees';
- make sure the assets of the fund are kept separate from the employer;
- make sure there are enough reserves to pay members' benefits as they fall due;
- tell members how the fund is going - this includes annual reports, statements of the member's balance, a member booklet that describes the characteristics of the fund, and an explanation of the investment strategy; and
- maintain accurate and proper accounts, and records of the superannuation fund.
The Act does not guarantee members' contributions. Instead it aims to increase the safety of the contributions, without actually underwriting them.
Record keeping responsibilities
The Superannuation Industry (Supervision) Act sets out certain record-keeping responsibilities:
- maintain accurate accounts;
- ensure the accuracy of accounts;
- maintain certain records of trustees meetings and copies of reports;
- lodge an annual return with the Australian Prudential Regulation Authority; and
- get the accounts audited every year.
The Superannuation Industry (Supervision) Act tells the trustee to consider:
- the risks and likely returns from the investments, after considering the objectives of the fund and its investment strategy;
- the mix of investments in the fund's portfolio (for instance, to spread the investments amongst different classes of assets);
- the liquidity of the fund's investments, looking at its cash flow requirements; and
- the needs of the fund to meet its current and potential liabilities.
Last Updated – June 2012
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This fact sheet is intended to be general information about the law in Australia. It is not a substitute for legal or other professional advice. Lawscape Communications Pty Ltd and Fairfax Digital Ltd do not accept responsibility for loss to any person, who either acts or does not act because of this fact sheet. Last Updated - October 2005