APRA action sees HESTA pay members over valuation decisions
Big nursing sector superannuation fund, HESTA been required by the Australian Prudential Regulation Authority (APRA) to make payments to members impacted by valuation decisions.
APRA said HESTA had agreed to make the payments related to valuation decisions made by HESTA in March 2020 at the beginning of the COVID-19 pandemic.
It said that on 20 March 2020, HESTA made downwards adjustments to five single sector Choice options invested in unlisted assets but did not adjust other options with exposure to the same underlying unlisted assets (including HESTA’s MySuper option) until one week later. APRA was concerned that:
- HESTA’s decision-making processes for out-of-cycle revaluations of unlisted assets were not adequate for the deteriorating market conditions faced by superannuation trustees in March 2020; and
- HESTA’s valuation decision in March 2020 was unfair to members who switched from an adjusted single sector options to unadjusted options within that week and members who were issued units in the unadjusted options during the relevant week. In one instance, a member who switched investments from the adjusted Choice options to the unadjusted MySuper option during the week in question was approximately $17,000 worse off.
The statement said APRA had engaged extensively with HESTA on the matter, including supervision activities to oversee strengthening of HESTA’s policies and procedures around unlisted asset valuation decisions.
It said APRA commenced a formal investigation into the issue in January 2024. In light of HESTA’s decision to make payments to affected members to make them good, and improvements to HESTA’s valuation policies and procedures, APRA has decided to close its investigation without further action.
HESTA later issued a statement in which it emphasised that there had been no findings of breaches or contraventions against it and pointing out that the median value of the adjustment would be around $17.
It said that it had been in discussions with APRA around the adjustments.
“This adjustment considers the difference in the value of units issued to these members at the time and investment earnings that would have subsequently accrued. Current members impacted by this adjustment will automatically receive the adjustment through their account and exited members will receive the equivalent dollar value of units via the ATO,” it said.
This adjustment will occur in the coming weeks and current impacted members will be separately notified.
Of course there is almost zero action from APRA against HESTA / ISA.
What about the Industry Super trustees that switched portfolio’s pre revaluations down ? Yep that’s fine too hey APRA & ASIC.
REGULATORY CAPTURE CORRUPTION is so strong between APRA, ASIC & Industry Super.
Just another example of where retail funds do something wrong, reimburse and compensate clients but are are still forced to pay massive penalties. Union funds do the same and APRA does nothing, ensure their mates are free to continue their ongoing practice of making up valuations on their unlisted assets as they have done for decades.
Confirmation of market manipulation and hybrid Ponzi scheme showing true colours! Now they are “encouraged” “they not have too” have to revalue unlisted assets every quarter guess what they achieve the same performance as the rest of the market go figure. why haven’t ASIC started Fined them already should be a record fine. 16,000 compliants from just one industry fund and then the next news headline ASIC take banks to court over 350 complaints if this doesn’t show regulators bais i don’t know what does.
What would happen if a publically listed company did something similar?
Why aren’t super funds held to the same accountability as publically listed companies?
Yeah, typical – one set of rules for Advisers and non Industry Super and a completely different set of rules for Industry funds – talk about graft and corruption by Labor and their cronies!
How is HESTA paying for the adjustments? Who pays for the market moves? All members? This is not communicated in their email. Was it an oversight or did they deliberately price differently? How does daily pricing not capture different valuations or maybe it does and it was overruled? So many questions still to be answered but so little chance of having them answered. Yet the rush to establish new global offices everywhere tramples the rush to transparency for members.