Customers who lost money after the collapse of super trustee Commercial Nominees of Australia will be bailed out to the tune of $25 million by the Federal Government. Assistant Treasurer Senator Helen Coonan announced on Friday that financial assistance will be granted to 181 small super funds that suffered losses in the CNA-run Enhanced Cash Management Trust.

“Losses to these have arisen as a consequence of fraudulent conduct or theft,” she said. “Some fund members lost a significant proportion of their retirement savings.”

Senator Coonan said the payout will be covered by a levy on other super funds, but hasn’t yet specified the levy amount. And she won’t authorise the payment of any interest on the losses because “it is not Government policy to underwrite superannuation fund investment returns”.

The CNA debacle has once again put APRA in the spotlight. Although the regulator was advised about CNA’s troubles in early 1999, it took until January 2001 to revoke its licence. ASIC was also supposedly aware of the situation in March 2000.

Opposition retirement incomes spokesman Senator Nick Sherry said APRA should be overhauled, pointing to CNA and HIH as “glaring examples of its failure”.