Mr Hallinan told SMSF Adviser the defined benefit trust deed contained a provision that enabled a member, in exceptional circumstances and who wanted to retire before age 55, to be paid an early retirement benefit upon the discretion of the trustee.

“There was quite a substantial financial difference between getting an early retirement benefit and getting the benefit that would otherwise have been paid,” he said.

“What happened was that provision was removed by a deed amendment. The argument was that the amendment wasn’t effective because it adversely affected the accrued benefit being the right to be considered for a retirement benefit before age 55.”

While Mr Beck was successful in the first instance, the NSW Court of Appeal ruled in favour of CBA.

“[The reason was] basically that the right to be considered for an early retirement benefit before age 55 was not an accrued right and therefore he wasn’t protected from amendment,” Mr Hallinan said.

“So it’s a case more concerned with the concept of accrued rights or accrued benefits, to that extent it does have an impact on all superannuation funds because of the wording of regulation 13.16 of the Superannuation Industry (Supervision) Regulations 1994 (Cth) (SIS Regulations).”

Mr Hallinan explained that regulation 13.16 is a restriction on the exercise of amendment powers.

“It’s an attempt to protect members from adverse amendments to accrued benefits,” he said.

“In this case, because their right to be considered for a defined benefit was not an accrued benefit, it could therefore be as it were, taken away by a deed amendment and the deed amendment would still be effective because regulation 13 16 didn’t protect that right.”