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ASIC prosecutes REST over alleged misleading statements to members wanting to move savings

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Neale PriorThe West Australian
ASIC is prosecuting REST over alleged misleading statements to members wanting to move savings
Camera IconASIC is prosecuting REST over alleged misleading statements to members wanting to move savings

The Federal corporate watchdog is prosecuting retail industry superannuation fund REST over allegedly unlawful conditions imposed on members wanting to transfer their savings to rival funds.

The Australian Securities and Investments Commission accuses REST of making a series of false or misleading statements to members who wanted to move their savings while continuing to work for employers linked to the $60 billion fund.

ASIC claims in a Federal Court action that allegedly false or misleading statements helped the industry fund retain at least $14.8 million from 1143 members whose balance rollover requests were refused.

And REST allegedly gained significantly more funds under management from these members and other people whose bosses continued to make contributions to the fund as a result of alleged misrepresentations about employer contributions.

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The corporate watchdog is seeking financial penalties and other orders against REST under the civil prosecution launched on Monday, focusing on alleged misrepresentations from 2014 to mid-2018.

REST said in a statement it was disappointed with ASIC’s decision to launch legal proceedings about a matter that the fund reported and over which it was remediating affected members.

One of the concerns raised by ASIC included the fund claiming a full-balance transfer request could only be processed after the member obtained a certificate of separation from their employer and after a termination date had been provided.

ASIC said the REST board ceased requiring certificates of separation on May 2, 2018.

REST said in its statement that the “business process” it removed in May 2018 did require “some members to provide an employment termination date or separation certificate to process a rollover of superannuation from REST into another fund”.

The super fund said it was contacting members who may have experienced delays in the transfer of their super as a result of the “application of this business process” from January 2014 to May 2018.

The watchdog said in a statement the misleading statements discouraged and delayed members from transferring their retirement savings balances to other funds.

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