A second large pension fund has severed ties with PwC Australia as a direct result of the leak of confidential tax intel the firm used to sell tax avoidance schemes to certain VIP clients. Australian Retirement Trust is the second largest pension fund in the country and joins largest fund AustralianSuper in breaking up with the most prestigious of Big 4 professional services firms.
Australian Retirement Trust, which manages A$240 billion ($159 billion) for 2.2 million members, “will not be undertaking any new contracts with PwC at this time,” a spokeswoman told Bloomberg in an emailed statement.
PwC stands to lose millions of dollars in revenue as clients review their relationship with the accounting agency. The firm describes itself as an “active participant” in Australia’s A$3.4 trillion pension industry, known locally as superannuation, according to its website.
AustralianSuper and Australian Retirement Trust manage $514 billion AUD ($342 billion USD) between them. AustralianSuper also has a $1.3 million audit contract with PwC it is reportedly reviewing. “AustralianSuper is concerned with the ongoing revelations around PwC and as a result has frozen any new contracts with PwC,” said a fund spokesman to numerous media outlets.
PwC has already been effectively banned from doing business with the Australian government.
The interesting thing about all of this fallout now is that up until recently it looked like the entire thing was going to be swept under the rug, the thing having happened way back in 2015. Leaky former partner Peter Collins was banned from practice for two years in January and the Tax Practitioners Board — which handed out Collins time out — ordered PwC to review and improve its conflict of interest training. PwC issued the usual “this is bad and we’re sorry” statement and that was mostly that. Or so they thought.
For the whole background on the PwC tax scandal, check out this killer reporting from Australian Financial Review. AFR has been on top of this from the very beginning and might be singlehandedly responsible for preventing the firm from receiving only a light slap on the wrist for all of this for which we salute them: The inside story of PwC’s tax scandal.