107Duty of trustee of employer‑sponsored fund to establish procedure for appointing member representatives

107 Duty of trustee of employer‑sponsored fund to establish procedure for appointing member representatives

(1) This section applies if the trustee, or the trustees, of a standard employer‑sponsored fund (other than a superannuation fund with no more than 6 members) are required by law: (a) if the trustee is a single corporate trustee—to have member representatives on the board of directors of the trustee; or (b) if there is a group of individual trustees—to have member representatives included in the group; or (c) in any other case—to have member representatives on a policy committee of the fund. (2) Each trustee of the fund must ensure that: (a) rules are established (whether by inclusion in the governing rules or otherwise): (i) setting out a procedure for appointing the member representatives; and (ii) ensuring that member representatives so appointed can only be removed by the same procedure as that by which they were appointed, except in the event of: (A) death; or (B) mental or physical incapacity; or (C) retirement; or (D) termination of employment; or (DA) the member representative no longer meeting one or more of the criteria for fitness and propriety relevant to the member representative set out in the prudential standards; or (E) the member representative becoming a disqualified person within the meaning of Part 15; or (F) suspension or removal under Part 17; or (G) other prescribed circumstances; and (b) those rules are published in such a way as will make members of the fund aware of the procedure for appointment and removal of member representatives. (3) A trustee is guilty of an offence if the trustee contravenes subsection (2).

Penalty: 100 penalty units.

(4) A trustee is guilty of an offence if the trustee contravenes subsection (2). This is an offence of strict liability.

Penalty: 50 penalty units.

Note 1: Chapter 2 of the Criminal Code sets out the general principles of criminal responsibility.

Note 2: For strict liability, see section 6.1 of the Criminal Code.