Notice of Disqualification – Michael Savage - 16 September 2024

Overview

The Superannuation Industry (Supervision) Act 1993 (SISA) was enacted to address the need for effective supervision and regulation of the superannuation industry, ensuring that trustees and responsible officers of superannuation entities act in the best interests of the fund's members. The legislation provides the framework for the regulation and oversight of superannuation trustees, aiming to protect the retirement savings of Australians by ensuring that those managing these funds are fit and proper persons. The Act was introduced by the Commonwealth Parliament to address significant gaps in the regulation of the superannuation industry, particularly in relation to the conduct and suitability of trustees and officers. The policy objective of the SISA is to maintain high standards of conduct and integrity within the superannuation industry, thereby safeguarding the financial security of superannuation fund members. The Act includes provisions for the disqualification of individuals who are deemed unfit to manage superannuation funds, ensuring that the administration of these funds is carried out by responsible and trustworthy individuals.

Scope and Application

The Superannuation Industry (Supervision) Act 1993 (SISA) applies to individuals and entities involved in the management and oversight of superannuation entities, specifically targeting those who act as trustees, responsible officers, or investment managers within the superannuation industry. This Act has a national jurisdictional reach, governing practices across the Commonwealth of Australia, and it extends its application to various entities including body corporates that serve as trustees, investment managers or custodians of superannuation entities. The Act imposes a disqualifying notice on individuals deemed unfit and improper to hold such positions, as exemplified in the case of Michael Savage. The disqualification is enforceable under subsection 126A(6) of the SISA and includes a publication requirement as a Notifiable Instrument in the Federal Register of Legislation, ensuring transparency and public awareness. Additionally, the Act delineates strict penalties for any disqualified person who knowingly continues to act in such roles, with potential imprisonment of up to two years as stipulated under section 126K of the SISA. The Commissioner also holds the authority to reconsider the disqualification decision, subject to a written request within 21 days from the date of notice, as outlined in section 344 of the SISA.

Key Provisions

The notice of disqualification issued under subsection 126A(6) of the Superannuation Industry (Supervision) Act 1993 (SISA) informs Michael Savage that he has been disqualified from serving as a trustee or responsible officer of a body corporate involved in superannuation entities. This disqualification was made by Emma Rosenzweig, a delegate of the Commissioner of Taxation, who determined that Michael Savage is not a fit and proper person for these roles. The disqualification is effective immediately from the date of the notice, which is 16 September 2024. The notice outlines the reasons for the decision and specifies that the details of this disqualification will be published as a Notifiable Instrument in the Federal Register of Legislation under subsection 126A(7) of the SISA. The SISA imposes certain obligations and requirements on individuals and entities within its scope. For Michael Savage, this includes adhering to the criteria of being a fit and proper person to hold positions of trust and responsibility within superannuation entities. The Act ensures that only those deemed suitable can manage or oversee superannuation funds, thereby protecting the interests of superannuation members. Additionally, under section 126K of the SISA, any disqualified person who knowingly continues to act as a trustee, investment manager, custodian, or responsible officer of a superannuation entity commits an offence. This requirement underscores the importance of compliance with the Act’s standards and the seriousness of disregarding disqualification orders. Breaching the provisions of the SISA can lead to significant consequences. Specifically, under section 126K, a disqualified person who continues to act in the prohibited capacity is liable for an offence. The maximum penalty for this offence is imprisonment for up to two years, highlighting the gravity of non-compliance with disqualification orders. This penalty serves as a deterrent to those who might otherwise disregard their disqualification and continue to operate within the superannuation industry. Furthermore, the SISA provides avenues for recourse and review. Under section 344, a person affected by a decision can request the Commissioner to reconsider the decision within 21 days of receiving notice, provided the request is made in writing and includes reasons for the perceived error in the decision. Finally, the SISA also includes provisions for the potential revocation of disqualification. Under subsection 126A(5), the disqualification can be revoked either on the initiative of the Commissioner or upon a written application by the disqualified person, Michael Savage. This flexibility allows for the possibility of reinstatement if circumstances change or if it is demonstrated that the disqualified person is now fit and proper to resume their role. This mechanism ensures that the disqualification process is fair and allows for the possibility of rehabilitation and re-entry into the superannuation industry under the correct conditions.