Australian superannuation fund HESTA has agreed to make payments to members who were negatively affected by the revaluation of unlisted assets at the start of the Covid-19 pandemic.
The Australian Prudential Regulation Authority (APRA) said HESTA made downwards adjustments to five single sector Choice options invested in unlisted assets on 20 March 2020, but did not adjust other options with exposure to the same underlying assets until one week later.
APRA was concerned the fund’s processes for out-of-cycle revaluations of unlisted assets were not adequate for the deteriorating market conditions and the valuation decision in March 2020 was unfair to some members.
APRA said in a statement one HESTA member was about $17,000 worse off.
HESTA said it had been in discussions with APRA about adjustments to the number of units some members acquired in certain investment options during the period of significant market volatility.
The fund said upon further analysis it determined that an adjustment to the number of units issued at the time be made for some members.
“There have been no findings of breaches or contraventions of the law. The median value of the adjustment will be around $17,” a HESTA spokesman said in a statement.
APRA said: “In light of HESTA's decision to make payments to affected members to make them good, and improvements to HESTA’s valuation policies and procedures, APRA has decided to close its investigation without further action.”
HESTA (Health Employees Superannuation Trust Australia) has about 1.1 million members, mainly in the health, community services and other public sectors, and has A$84 billion in funds under management.