‘Consolidation indigestion’ hinders super fund mergers

APRA super superannuation M&A

27 June 2022
| By Laura Dew |
expand image

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.

Read more about:


Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry



It is fascinating to see that this year - 2 funds (Mine Super & CFS FirstChoice Employer Super) which failed APRA Perfor...

1 day 8 hours ago
Mitch VB

Thanks for providing us even more work in educating clients on the growth/ defensive splits of all these "top" performer...

1 day 8 hours ago

Why would you do that for? It would be a case of the same circus, different clowns....

1 day 14 hours ago

Insignia Financial has unveiled a new operating model and executive team, including a new head of advice, while three senior executives are set to depart the licensee....

1 week 1 day ago

The $280 billion Australian Retirement Trust is the first superannuation fund off the block to report its performance for the 2023-24 financial year....

2 weeks 4 days ago

ASIC has permanently banned a former Western Australia-based financial adviser after he falsified his adviser exam certificate....

1 week 4 days ago