Ever noticed your retirement nest egg getting a makeover? Your superannuation statement shows up with a brand new name on the envelope, welcome to the world of superannuation mergers!
Where’s my super fund gone?
Superannuation funds are under increasing pressures to consolidate and achieve economies of scale, which ideally will leave to a more streamlined superannuation landscape. But is this a good thing?
Positives
By joining forces, funds can reduce operating costs, streamline administrative processes, and negotiate better deals on investments and services.
Merging also allows funds to strengthen their financial position and improve their ability to deliver competitive returns and services to members in an increasingly complex regulatory and economic environment.
Consolidation also enables funds to adapt to changes in the industry, such as technological advancements and evolving member expectations, ensuring they remain sustainable and capable of meeting the long-term needs of their members
Negatives
One potential negative aspect of merging superannuation funds is the risk of reduced competition within the industry. As funds consolidate, there may be fewer players in the market, leading to decreased competition and potentially limiting choices for consumers. This could result in less innovation, fewer tailored services, and reduced pressure for funds to perform at their best.
Additionally, mergers may result in job losses or changes in employment conditions for staff within the merging funds, which can have negative implications for workers and their families.
Finally, there is a risk that the cultural identity or unique features of individual funds may be diluted or lost through consolidation, potentially impacting member satisfaction and engagement.
Final Thoughts
Merging of superfunds can lead to some obvious advantages regarding costs to members and performance of their investments.
But, superfunds need not to loose sight of their members. We’ve noticed that some recent mergers have resulted in reduced or limited member services, with particular pain being felt with those based in regional locations.
