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Thursday, 5 December 1985
Page: 3104


Senator BOLKUS(11.40) —I must admit I am quite stunned by the contribution of Senator Vanstone but I will not comment any more on it. I want to speak very briefly about a superannuation case that has been presented to me. I do so in the context of the debate that is going on at the moment about who is competent and responsible enough to handle superannuation funds. It has been contended in this place and also publicly that the trade union movement is not competent to do this. The point I wish to make tonight in highlighting a particular instance of a constituent, not of mine but someone in Victoria, is that the trade union movement may be a more responsible body to handle superannuation funds than those who have been charged with the specific responsibility to date.

I raise the problem relating to the late Ian Macquarie, who died recently leaving three children all under the age of 14. He died after many years of work with his company. He stuck with his company after a takeover and worked for it assiduously and consistently. On the termination of his employment his superannuation payout was calculated. His family received $104,000. The problem is that there is a disputed amount of $8,000. One might think that $100,000 is enough and $8,000 should be seen as petty cash and not be argued about. But to a mother of three children left to guard and look after her children and bring them up it is obvious that $8,000 is, and will be, important to her.

What is disputed in this case is the date of termination of employment. Ian Macquarie was entitled to four times his eligible salary at the date of total and permanent disability. Under the superannuation agreement and trust deed that was operating in his case, the trustees of the deed deemed his date of ceasing active employment as 16 January 1984. On 20 September 1984 they wrote a letter to that effect. However, after that date Ian Macquarie went to work, was tested for employability, and continued working.

The main reason why the trustees saw 16 January 1984 as the date of termination of employment was that Macquarie soon after that date signed a declaration stating that he felt that he was unable to work as from 16 January 1984. It should be noted that he signed the declaration at a time when he was totally distressed. He had just been advised that he was dying of cancer and as a consequence his mental stability was diminished. However, having signed such a form, he was allowed to go back to work. As has been acknowledged in correspondence from the FSE scientific superannuation plan, he was able to go back to work and in fact worked until 25 May 1984. Ian Macquarie declared that he was unable to work on 16 January 1984. He did not declare that he was totally and permanently disabled on that date. By his employer's later actions it is quite apparent that they felt there was some chance he was able to to work after 16 January. In correspondence of 20 September 1984 the FSE stated that Mr Macquarie's employer subsequently terminated his employment on 25 May 1984. This date is important because the difference of those four months means that an amount of $8,000 has been denied to the widow and children of Ian Macquarie.

So, let me restate: Ian Macquarie was allowed to go back to work. He was tested by the company over a period, and then his employment was terminated. There was obviously some doubt, for four months, as to whether Macquarie could go back to work. There was obviously some doubt as to whether he was totally and permanently-I stress the word `permanently'-disabled for employment. That point was obviously known to the company and to the trustees of the superannuation fund.

It also should be noted that in correspondence to Senator Cooney dated 11 September 1985, it was recognised by the trustees that the date of disability was the date active work ceased. Let me restate that Ian Macquarie worked to 25 May 1984. Let me also state that in a report dated 1 March 1985, Macquarie's doctor declared that Macquarie was fit to return to work in April 1984.

What we have here is a situation in which the trustees-in this instance people who are directly, and probably with vested interests, involved in the operation of the company and the trust-have declared that Macquarie's eligible salary for the purpose of calculating superannuation was that accrued at 16 January 1984. Despite the fact that Macquarie went back to work, and despite all the other considerations I have mentioned, they denied that he was employable up to May 1984. As a consequence, his widow has been deprived of $8,000.

This decision by the trustees of the fund is a wrong one. In fact they have miscarried their duties, in my assessment of the situation and also on my reading of the fund. They have, in fact, relied on the technicality of the signature when, under the responsibilities of trustees, they should act both honestly and reasonably. In doing so, they would have recognised that Macquarie had returned to work, that his employer took him back on a trial basis, and that the declaration made by Macquarie, an error of fact, could not have been relied on by them as being fundamental in their decision making. They should also have recognised that his period of re-employment should have dissolved the effect of that declaration, signed by him, stating that he was not fit for work on 16 January.

What we have are trustees acting not honestly and reasonably but technically and outside the spirit of the trust and of operating legislation. As a consequence, we have them operating in the interests not of the beneficiary but soley in the interests of the companies involved in the trust. As a consequence, we have employers' representatives not acting fairly in the interests of the employee. Let us look at that in the context of the debate we have had today and in recent days in terms of superannuation trusts. I do not believe that the workers of this country ought to be at the whim of capricious trustees of trusts such as this one. I believe that Ian Macquarie's widow and children are entitled to the money. I believe that for the trustees to act behind a technicality is neither honest nor reasonable, and is a breach of their trust. I believe that the trustees have an obligation to review their decision once again.

In closing, let me say that I have tried today to contact Mr Townsend, a person who is a trustee of the fund, but without success. I will be contacting him in the next few days to alert him of my speech tonight and ask him to reconsider this decision made by the trustees. It is quite unfortunate that this position has been taken and has been adhered to by the trustees, but I hope that in the spirit of reasonableness they will review their decisions.