Super funds warned on merger ‘deal-breakers’

Superannuation funds need to deal with the “deal breakers” which would abort a merger early or risk the ire of the regulators, according to Mills Oakley financial services partner, Mark Bland.

Participating on a panel at the Conference of Superannuation Funds (CMSF), Bland said that fund trustees and executives could expect little sympathy from the regulators if merger talks broke down simply because they had failed to identify and deal with the tough issues up-front.

“Don’t kick the tough issues down the road,” he said.

Bland said that superannuation fund trustees needed to have a good understanding of counter-party risk – something which meant they had undertaken thorough due diligence.

“If you lie down with dogs, you can expect to get up with fleas,” he said.

Bland said it had been made clear during the Royal Commission and elsewhere that there would be much less tolerance from the regulators where mergers were concerned.

Discussing the level of detail which was likely to be examined by the regulators, he said trustees and executives had to ask themselves the degree to which they were prepared to be scrutinised.



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