Defence Super Fund fixes Negative Contributions

Comrade Trustee Services Limited (CTSL) has announced that it now has a solution in place to address negative contributions received fortnightly from the State.

This is an outcome following close collaboration with the respective payroll agencies of the Department of Finance, Department of Defence, and the PNG Defence Force.

CTSL CEO, Charlie Gilichibi, said ‘negative contributions’ is a long-standing industry issue that needs to be brought into alignment with legislative and regulatory compliance and putting in place controls to address operational risks.

A ‘negative contribution’ is used to adjust a previously overpaid contribution amount paid to a super fund by an employer on behalf of an employee.

Gilichibi says negative contributions are system generated from the Alesco Payroll system and affects industry funds catering for the Public Service and State Services Employees.

The creates further issues on fund accounting and year-end audits when reconciling member data.

“It doesn’t only affect CTSL but it also affects the industry as a whole that receive contributions from the state because we all depend on the Alesco payroll system. The issue (negative contributions) is system generated and when it comes in, it takes our guys the manual effort to go and clean up the data. But for us as trustee, we don’t want to be touching that data because it opens up risks for us. It could be fraud and in the first place its already in breach of the Superannuation Act because there should be no claims against member savings. Because the effect of that is if we let it through, it will go and write down member balances in the fund,” said Gilichibi.

CTSL Statutory Manager, Sitiveni Waleilakeba, says they are working on the fundamentals of the organization, including operational efficiencies, to address legacy issues such as this.

“From the perspectives of how do we balance the abnormal activity that happened in the past, for example, there’s a lot of outflows and less inflows coming in. those are structural issues that we need to address. But it’s been happening in the past but no focus has been given to this very particular important factor because if there is a minus all the time, there is no fund available for investment,” said the Waleilakeba.

CTSL thanked that the payroll heads from the DoF, DoD, and the PNGDF for their assistance in working to address the industry matter.

Cedric Patjole