‘Deeply disappointed’: Super funds freeze PwC contracts
At least five Australian super funds are freezing new contracts with PwC amid the tax leak scandal embroiling the accounting and consulting firm, with Aware Super and Care Super the latest to review their dealings with the company.
Several of the country’s biggest superannuation funds, responsible for hundreds of billions of dollars in retirement savings, have so far taken the advice the Australian Prudential Regulation Authority to consider the risks associated with contractors.
An Aware Super spokesperson said the fund looked forward to the full extent of PwC’s conflicts being investigated, after revelations that a partner at the firm leaked confidential federal government tax plans to corporate clients.
“Out of an abundance of caution we have temporarily frozen any new contracts with PwC,” the spokesperson said. “Like many others we’re deeply disappointed by the reported failures of governance, accountability and culture at PwC.”
A source with knowledge of the situation said Care Super had paused new contracts with PwC and was considering freezing future contracts. Further discussion on the matter was set to take place at a future board meeting.
The two super funds join a growing list that have been taking a second look at contracts with the consulting firm.
On June 2, AustralianSuper, the country’s biggest super fund, paused any new contracts with the consulting firm, citing concerns to the “highest level” of PwC. “AustralianSuper is concerned with the ongoing revelations around PwC and as a result has frozen any new contracts with PwC,” a spokesman said.
While the $270 billion super fund said it had paused committing to new work with PwC, it was not cancelling existing contracts.
Australia’s second-largest pension fund also joined the boycott on June 6, with Australian Retirement Trust saying in a statement to Bloomberg it “will not be undertaking any new contracts with PwC at this time”.
On June 7, HESTA also confirmed it had frozen work with the consulting firm, saying it was “very concerned about what has emerged regarding PwC” and was engaging directly with the company.
A Cbus spokesperson said the PwC scandal was “absolutely front of mind” and the fund was working on processes and engaging with the consultancy firm in line with regulatory guidance, but declined to comment on the status of its dealings. Cbus has previously used PwC as its internal auditor.
Despite the deepening scandal and mounting pressure for a freeze on future work with PwC, the Victorian government has continued to sign contracts with the embattled consultancy, including for an audit of an agency that manages $70 billion of public funds.
While the state government announced an overhaul of its code of conduct for suppliers of services, possibly including tough new penalties for contraventions of the code, it has signed and renewed a number of contracts with the consultancy.
The Victorian Funds Management Corporation, which manages investments for 31 government agencies and several major hospitals, signed a $500,000 contract with PwC for internal auditing despite the scandal deepening in May.
However, there are signs that corporate clients are moving from a neutral stance on the scandal, even before investigators have scrutinised possible links to PwC.
Construction company Lend Lease paused plans to appoint PwC as its new auditor, and ASX-listed toll road operator Atlas Arteria’s chair, Debbie Goodin, offered assurances before investors voted to keep PwC as the auditor of its Bermuda-based subsidiary, pointing to challenging decisions corporate clients face as investigations into PwC continue.
Care Super was contacted for comment. UniSuper declined to comment.
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