Court advises trustee of REST that it may amend its trust deed to allow remuneration of directors
It may seem remarkable that until 14 November 2013 the trust deed of the Retail Employees Superannuation Trust – Australia’s third largest industry super fund with more than 1.9 million members and more than $27 billion under management – did not permit its directors to receive remuneration.
The trustee brought proceedings in the NSW Supreme Court for advice or orders conferring a power on it to pay remuneration to its directors. The trust deed contained a power of amendment, but the trustee sought to avoid the suggestion of any conflict between the duties of its directors and their personal interests.
Stakeholders (including APRA and various sponsor organisations) had stated they had no objection to the proposal. One sponsor organisation expressed the view that it was appropriate for directors of industry super fund trustees to continue to act gratuitously. The objecting organisation did not wish to be joined as a defendant.
The Court accepted the evidence showed that significant and burdensome obligations were placed on the trustee’s directors. It was reasonable to expect remuneration was required to attract and retain directors of the requisite quality. It was not necessary for the Court to make orders under s 81 of the Trustee Act 1925 (NSW) (orders conferring power on a trustee in respect of an arrangement the Court considers expedient) because the trust deed contained a power of amendment. Instead the Court gave advice, pursuant to s 63 of the Act that the trustee was justified in amending the trust deed to permit the remuneration.
In Victoria the right of a trustee to approach the Supreme Court on questions of administration is found in order 54 of the Supreme Court (General Civil Procedure) Rules 2005.