POWERED BY MOMENTUM MEDIA
‘Consolidation indigestion’ hinders super fund mergers
The Australian Prudential Regulation Authority (APRA) is pushing for superannuation funds to merge but some are facing ‘consolidation indigestion’ in the process.
In a speech by APRA chair Wayne Byres and director of superannuation, Suzanne Smith, the regulator said larger super funds had economies of scale which could deliver better member benefits.
However, it is not necessarily a smooth process for all funds.
APRA said: “Signing the deal, however, is only the first step in realising benefits for members. Depending on the nature of the transaction, we are observing funds facing difficulty due to what we refer to consolidation indigestion.
“This may manifest at the industry level at the point of transfer in a SFT [successor fund transfer], for example where an administrator has a backlog of transfers to process.
“Alternatively, it may be within an entity itself where the transaction results in a merger of businesses requiring integration of people, systems and processes to deliver the real advantages to members – the complexity of which should not be underestimated. This is more pronounced in scenarios where multiple transactions have been undertaken in quick succession.”
It recommended trustees remained firmly focused on translating the financial benefits to their members.
AUTHOR
Laura Dew
Laura Dew is editor at Super Review. Prior to joining SR, she spent five years working at Investment Week in the UK covering asset and wealth management.
Recommended for you
The proposed reforms have been described as a key step towards delivering better products and retirement experiences for members, with many noting financial advice remains the “urgent missing piece” of the puzzle.
Jim Chalmers has defended changes to the Future Fund’s mandate, referring to himself as a “big supporter” of the sovereign wealth fund, amid fierce opposition from the Coalition, which has pledged to reverse any changes if it wins next year’s election.
In a new review of the country’s largest fund, a research house says it’s well placed to deliver attractive returns despite challenges.
Chant West analysis suggests super could be well placed to deliver a double-digit result by the end of the calendar year.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
Spire Oaktree Opportunities XI Second Close
61.07 3 y p.a(%)
2
Spire Oaktree Opportunities XI First Close USD
59.21 3 y p.a(%)
3
DomaCom Lot 21 Chellaston Road Munno Para West SA 5115 Australia
31.56 3 y p.a(%)
4
Fidante Credit Suisse Global Private Equity
31.06 3 y p.a(%)
5
DomaCom 4/27 Crombie Avenue Bundall QLD 4217 Australia
26.81 3 y p.a(%)
