Super news for June 2024

Court finds Active Super made misleading ESG claims

The Federal Court has found the trustee of Active Super (LGSS Pty Limited) contravened the law in connection with various misleading representations concerning its environmental, social and governance (ESG) credentials.

The Federal Court found that from 1 February 2021 to 30 June 2023, Active Super invested in various securities – both directly and indirectly – that it had claimed were eliminated or restricted by ESG investment screens.

“I am unable to accept LGSS’s contention that an ordinary and reasonable member of the relevant class would draw a distinction between holding shares in a company and indirect exposures through pooled funds,” his Honour Justice O’Callaghan said.

“It seems to me that such a consumer would not draw that distinction, including in particular because there is nothing in the Impact Reports or on the LGSS website that suggests that the claims that there was, for example, “No way” Active Super would invest members funds in gambling, tobacco and so on, was to be read subject to a proviso that there was a way in which it would do exactly that, by investing indirectly, not directly. In my view, that distinction is one which no ordinary reasonable consumer would draw.”

The Court will consider a pecuniary penalty at a later date.

Two serving members of the NSW Parliament were on the board of Active Super at the time of the finding, with Penrith MP Karen McKeown understood to have since resigned. Member for Leppington Nathan Hagarty remains on the board of the fund.

Total super assets up by 11.3%

Total superannuation assets increased by 4.2% over the quarter and 11.3% over the year to be $3.9 trillion, according to the latest quarterly superannuation data from the Australian Prudential Regulation Authority (APRA).

“This increase was led by strong growth in APRA-regulated funds, which increased by over 4.8% over the quarter, driven by strong returns from financial markets,” APRA said.

Of total superannuation assets, $2.7 trillion are in APRA-regulated funds.

Total contributions also increased by 11.3% over the year to $177 billion. Within contributions, employer contributions increased by 12.4% over the year to $133.3 billion as the superannuation guarantee rose from 10.5% to 11% on 1 July 2023, and member contributions increased by 8.2% over the year to $43.7 billion.

ASFA retirement index in line with CPI

The cost of funding a comfortable retirement increased by 3.3% over the last 12 months to end March, according to the Association of Superannuation Funds of Australia (ASFA) Comfortable Retirement Standard, just slightly lower than the annual CPI increase of 3.6%.