POWERED BY MOMENTUM MEDIA
What impacts successful administration services for super funds?
Building capability in a merger-heavy environment, technological adaptability, and enhancing operational efficiencies are among some of the key elements impacting successful administration service delivery for super funds, according to a senior superannuation executive.
“Administration is really the engine room that powers the superannuation industry,” explained Scott Abercrombie, head of superannuation consulting at SuperRatings.
“Without these essential services, members would not to be able to engage with their super fund in the way that they do today. It's not always glamorous and it is hard work, but getting administration right ensures that the flow-on benefits to members are certainly there.”
While the industry had been long dominated by two major administration providers, Link and Mercer, he noted there were numerous alternative providers “waiting in the wings to make their mark”.
“Many of these providers offer a range of solutions from software support in support of an internalized model through to full end-to-end administration capability, including core registry systems, and contact centre services,” he observed.
“These providers either have some local superannuation experience or [they] will say they can bring the experience they’ve gained offshore in providing pension services around the globe and translate that to the Australian market successfully.
“But it can require a leap of faith on the part of super fund trustees to move away from better known and more entrenched administration providers in favour of some of these alternative providers that are operating or thinking to operate in the market.”
Most recently, US-based fund administrator and outsourcing provider SS&C Technologies signed its first client in Australia in Mine Superannuation Fund. It would now deliver administration services to the fund’s over 55,000 members.
However, some super funds preferred to opt for internalised administration services, citing greater control of member data.
Abercrombie noted: “Whichever side of this debate you might sit, with stapling continuing to entrench itself in the industry and the fight for members never been more hotly-contested than what it is today, getting that balance or operating model right is crucial to ensuring that you're delivering the best possible member outcome through your members, but doing that in a cost-effective way.”
In 2022, mergers and acquisitions played a large part in reshaping the super landscape. As Abercrombie noted, bringing administration systems together, particularly when they sit on different platforms, was no mean feat.
Additionally, he added, capacity constraints had been observed in the administration sector which made it crucial to get in early amid mergers.
“It takes a lot of planning, high degree of accuracy, experience, resources, and lots and lots of time. So consider the number of fund mergers that are either happening at the moment or announced to happen, and spare a thought for the administrators who are tasked with bringing these funds together,” he said.
Ultimately, Abercrombie foresaw a bright future for the ever-changing industry with the help of technological advancements.
“It's really through the use of technology that we're increasingly getting closer to the pursuit of a cohort of one, meaning funds can deliver bespoke solutions to their members, whether it be predictive nudges, behavioural communications or other forms of tailored services, all designed to lift the engagement levels across the industry, which I think everyone agrees needs to happen,” he concluded.
AUTHOR
Rhea Nath
Rhea L Nath is a journalist on Super Review and InvestorDaily, with a focus on funds management, superannuation, and institutional investment. Previously, she covered small business and entrepreneurship news at Dynamic Business and multicultural issues at Indian Link Media Group. In 2022, she was named Young Journalist of the Year at the NSW Premier’s Multicultural Communications Awards.
Recommended for you
Super funds had a “tremendous month” in November, according to new data.
Australia faces a decade of deficits, with the sum of deficits over the next four years expected to overshoot forecasts by $21.8 billion.
APRA has raised an alarm about gaps in how superannuation trustees are managing the risks associated with unlisted assets, after releasing the findings of its latest review.
Compared to how funds were allocated to March this year, industry super funds have slightly decreased their allocation to infrastructure in the six months to September – dropping from 11 per cent to 10.6 per cent, according to the latest APRA data.
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
31.73 3 y p.a(%)
4
Fidante Credit Suisse Global Private Equity
30.15 3 y p.a(%)
5
DomaCom 4/27 Crombie Avenue Bundall QLD 4217 Australia
26.71 3 y p.a(%)
