The acting trustee of superannuation products formerly managed by Trio Capital has been forced to keep aside more than $8 million from three funds to cover potential legal claims.
ACT Super Management director Shane O’Keeffe said the firm had recently become aware of two claims that warranted an increase in the amount of cash being retained by the Astarra Superannuation Plan, Astarra Personal Pension Plan and My Retirement Plan to pay out the potential liabilities.
“Specifically, these include potential claims against the funds arising from the conduct of Trio. Two such claims have recently been notified in an amount of $8.2 million,” O’Keeffe said.
“The acting trustee will investigate and, where appropriate, resist and/or defend such claims against the funds on any grounds properly available to the acting trustee or the funds.”
He also said retaining money within the funds would clearly have an impact on how much could be transferred in the second tranche of the firm’s successor fund transfer (SFT) arrangement with AMP.
“Pending resolution of the funds’ liability position, the acting trustee must retain sufficient cash to deal with that contingency,” he said.
“Once that process has been completed, the acting trustee will then release the available cash, which will be credited to members’ balances with AMP by way of a further SFT tranche.
“As a result, the quantum of the second tranche transfer will vary from member to member, depending upon their elected investment options’ exposure to the claims that have been made.
“At this time the acting trustee is unable to estimate with any certainty when it might be in a position to complete the process of determining the funds’ final liability position, since it is dependent, in large part, upon the progress of third-party claims. The acting trustee will, in the interim, do everything within its power to resolve these issues.”
Last year, ACT Super chose AMP SignatureSuper to become the successor super fund for Trio products, including the Astarra Superannuation Plan, Astarra Personal Pension Plan and My Retirement Plan.
Under the deal, around $200 million of unimpaired assets within the funds would be transferred to AMP SignatureSuper in several tranches and invested in a portfolio profile comparable to the previous investment.
The first tranche of money within the funds was transferred to AMP on 23 December 2010 and represented around 40 per cent to 45 per cent of estimated member balances.
A federal government spokesperson said the $8.2 million in claims referred to a different investment vehicle and would not affect the government’s $55 million Trio compensation payment announced in April.
The Australian Prudential Regulation Authority suspended Trio Capital as the trustee of its four superannuation funds and one pooled superannuation trust on 17 December 2009.
On the same day, ASIC suspended the Australian financial services licence held by Trio Capital, under which it acted as responsible entity of 24 registered managed investment schemes, including the Astarra Strategic Fund Trio’s four main superannuation funds had around 10,000 members and their reported assets as at September 2009 totalled $300 million.
Total assets under management in Trio’s superannuation entities and registered managed investment schemes was about $426 million.
