The total and partial outsourcing of corporate superannuation funds has changed the face of the Australian superannuation sector over the past 12 months. The major platform providers, administrators and asset consultants, as well as a handful of industry funds emerge from this as the clear-cut winners.
The degree to which the landscape has been changed is exemplified by the fact that major funds such as the Coles Myer Superannuation Fund and the Woodside Superannuation Fund have been wound up and are now part of the Mercer Superannuation Trust, while the Caltex Superannuation Fund is now being run by AON.
Then, too, there has been the merging of funds and the consequent migration of those funds to platforms.
And where corporate superannuation trusts have not disappeared, then chances are they are being administered by the likes of Towers Perrin, Mercer, Watson Wyatt or Mellon.
In fact, the data shows that Mercer and Towers Perrin and Watson Wyatt have become increasingly dominant in the administration arena, particularly with respect to corporate funds, while Mercer and Towers Perrin come up as dominating the asset consultancy arena with respect to corporate superannuation.
JANA, which emerged as a leading light in last year’s Super Review Top Super Funds survey has maintained its strength in the public sector and industry superannuation fund arenas.
However, gaining a clear picture of winners and losers is not easy in circumstances where outsourcing has led to funds utilising different firms to undertake their administration, consultancy and actuarial functions.
So where did the money go to? Quite simply, it can be tracked to the big platform providers such as AMP, Mercers, ING and MLC.
According to data compiled by Dexx&r the top 10 platforms are:
1 AMP
2 Mercer
3 ING
4 MLC
5 Plum
6 AXA
7 Colonial
8 ANZ
9 IOOF
10 ASGARD
The picture which has emerged has been well explained by Towers Perrin Principal Steve Schubert elsewhere in this edition of Super Review where he points out that the latest Australian Prudential Regulation Authority statistics reveal that over 400 corporate super funds disappeared over the year to September 2003 — a 19 per cent reduction.
Schubert says that some corporate funds are proving resilient to the outsourcing bug, but the bottom line is that many companies have reviewed their superannuation strategies and have either chosen to outsource either in whole or in part.
In the last survey, there were 190 corporate funds ranging from $35 million to nearly $4 billion in assets. But since then, funds run by such household names as Coles Myer, Boral, Hewlett Packard and AGL have simply ceased to exist.
“Over the period of decline in fund numbers, many companies reviewed their superannuation strategies and chose to retain their fund under a different management model. Generally, this involved a rethink about which services are retained in-house and which are outsourced,” he says.
He adds that one of the more interesting phenomena has been the number of funds which have chosen to retain their stand-alone fund, but outsource all services including the role of trustee.
MLC holds a similar view and has been ensuring that its products and services are structured accordingly.
“A major trend that we are seeing from corporates is that they want assistance for their employees beyond investment choice and price,” says John James, general manager MLC Corporate Solutions, SME Business.
“Corporates are looking to access a range of ongoing services for their employees including financial education and advice, lifestyle benefits and a range of other financial services,” he says.
