Media Release

SAFETY OF SUPERANNUATION INVESTMENTS

The Chair of the Senate Select Committee on Superannuation and Financial Services (Senator John Watson, LIB, TAS) today called for an urgent investigation and report by the Australian Prudential Regulation Authority (APRA) and the Australian Securities and Investments Commission (ASIC) into the security of superannuation investments administered by Commercial Nominees Australia Limited (CNAL).

"The Committee demands an urgent investigation into non-arms length inconsistencies with fund operations, claims of improprieties, inaccurate descriptions of investment vehicles, and inappropriate and bad investment and administrative decisions made by some of the funds administered by CNAL", Senator Watson said.

The Committee is particularly concerned by press reports and representations to the Committee claiming disturbing losses of individuals' superannuation income on account of trustees' allegedly inappropriate investment activities. According to media reports, up to 80 percent of the retirement savings of around 300 retirees may be at risk.

CNAL, which is subject to regulation by APRA, is claimed to have invested superannuation funds in long-term investment projects, some of which were linked to private ventures and the directors of the same trustee company. The Committee is concerned that this is an example of incidents where superannuation fund trustees may have made investments on a non-arms length basis in a manner that may not be consistent with their obligations under prudential legislation.

Senator Watson said the Committee expects swift and direct action by APRA and ASIC to investigate the claims, in an effort to maintain ongoing confidence in Australia's superannuation system.

Contact:

For comment:	Senator John Watson Chair	02 6277 3685 (Canberra) 03 6331 4544 (Launceston, TAS)
For information:	Tracey Noble Principal Research Officer	02 6277 3579

8 January 2001