An independent expert has criticised the Construction and Building Unions Superannuation Fund (Cbus) for the governance associated with its payments to a union linked to organised crime.
Deloitte said Cbus did not have proper processes to ensure that its “partnership” payments to the Construction, Forestry, Maritime, Mining and Energy Union (CFMEU) were in the best financial interest of members.
Cbus, which manages more than A$94 billion of retirement savings, was ordered by the Australian Prudential Regulation Authority to commission an independent review by the professional services firm covering fitness and propriety policies, practices and decisions related to directors and board appointees.
In a 98-page report, Deloitte said it was clear that Cbus “has failings in the design and operation of its best financial interest duty (BFID) arrangements”.
“It is our assessment that lack of consistency, appropriate process, appropriate governance, and necessary rigour, are all areas for improvement and currently lacking for the determination as to whether expenditure decisions have been made in the best financial interests of members,” Deloitte said in the report.
The review considered payments by Cbus to the CFMEU since 1 July 2022 and planned up to June 2026 totalling $912,500 for “partnership agreements”, including payments for rent, leases and research into renewable energy.
Releasing the Deloitte report, Cbus said it acknowledged the seriousness and importance of the work required to strengthen the fund’s systems design, frameworks, policies, processes, governance and reporting.
Cbus said in a statement that all 26 recommendations in the Deloitte review had been accepted in principle by the Cbus Board.
Tensions escalated between APRA and Cbus after the fund appointed three directors nominated by the CFMEU, whose officials or members have been accused of organised crime, corruption, workplace violence, bullying and intimidation, misuse of funds, and illegal or unethical conduct.
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