POWERED BY MOMENTUM MEDIA
Members must be at heart of merger decisions
The Royal Commission’s final report has reinforced that members’ best interests must be the determining factor in any considerations of superannuation fund mergers, after more than one fund in the last year has faced criticism over decisions not to merge.
“The determining question cannot be whether one or more of those who are directors before the merger will have a place on the new board,” Royal Commissioner Kenneth Hayne wrote.
He pointed to the case studies considered during the Commission as showing some recurring issues arising in this regard when possible mergers were considered by funds.
“In particular, the evidence pointed to processes related to board composition of the merged funds as being important to the success or failure of some merger proposals,” the report said.
“Likewise, care must be taken when considering whether proposals about board nomination and selection procedures for the board of the new entity are assessed according to the interests of members, or the interests of shareholders or nominating organisations of the merging trustees.”
Hayne reinforced that trustees of registrable superannuation entities (RSEs) offering MySuper products must determine annually whether the fund has sufficient scale to ensure that the financial interests of beneficiaries weren’t disadvantaged relative to those in other RSEs’ MySuper products, and that such a scale assessment should invite attention to the question of mergers.
Recommended for you
In its pre-election policy document, the FSC highlighted 15 priority reforms, with superannuation featuring prominently, urging both major parties to avoid changing super taxes without a comprehensive tax review.
The Grattan Institute has labelled the Australian super system as “too complicated” and has proposed a three-pronged reform strategy to simplify superannuation in retirement.
Super funds delivered a strong 2024 result, with the median growth fund returning 11.4 per cent, driven by strong international sharemarket performance, new data has shown.
Australian Ethical has seen FUM growth of 27 per cent in the financial year to date.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
Spire Oaktree Opportunities XI Second Close
32.68 3 y p.a(%)
2
DomaCom Lot 21 Chellaston Road Munno Para West SA 5115 Australia
31.72 3 y p.a(%)
3
Spire Oaktree Opportunities XI First Close USD
31.36 3 y p.a(%)
4
Fidante Credit Suisse Global Private Equity
29.60 3 y p.a(%)
5
Global X GlobalX FANG+ ETF
27.64 3 y p.a(%)
