Cbus CEO says key staff decisions his, not Swan’s

Major construction industry fund Cbus has revealed that it only discovered on Monday that the Australian Securities and Investments Commission (ASIC) intended to announce that it would be pursuing civil action in the Federal Court against the fund over alleged insurance claims handling shortcomings.

Cbus chief executive, Kristian Fok explained that to the Senate Economics References Committee that until it received this news from ASIC the fund had felt constrained about appearing at the Senate hearings.

NSW Liberal Senator, Andrew Bragg then probed Fok on the level of involvement of Cbus chair and former ALP Federal Treasurer, Wayne Swan, in the running of Cbus the chief executive denied that Swan played a role in recent executive departures from the fund.

“All decisions around that are mine,” he said. “The structure changes are mine. They are made to implement the strategy and the direction that I have identified and the board has agreed.”

Bragg also questioned Swan’s role in committing Cbus to a $500 million to investments via the Housing Australia Future Fund (HAFF).

Fok also made clear that moneys which flowed from Cbus to the Construction Forestry and Maritime Employees Union (CFMEU) were not gifts or donations.

“These are not gifts, they are not donations they are separated into a couple of categories – one category is payment for the directors they put on the board and the larger amount is based on our partnerships program,” he said.

However, Fok said he was not prepared to go into too much detail around the parnterships program because it is the subject of an independent investigation.

“But what I will say is that there is a huge benefit and a strong reason for us to reach out to people in the construction industry around the issues that are relevant to our differentiated products and this is particularly so given safety and the dangerous occupation elements of insurance,” he said.

ASIC’s action against Cbus has prompted the broader superannuation sector to issue assurances around member services with the Association of Superannuation Funds of Australia (ASFA) issuing a statement noting that it had issued guidance to member funds on Death Benefit Payments.

Appearing before the Senate committee, ASFA chief executive, Mary Delahunty said that in a given year funds and service providers processed around 10,000 death insurance claims and around 36,000 claims related to disability.

“ASFA has spent a significant amount of time working closely with our members to identify what can be done, from a practice and policy perspective, to lift the consumer experience, particularly in the area of death benefit claims,” she said.

“We are confident this will lead to a significant improvement for Australians.”