10 of 13 ‘failed’ super funds have changed

Six of the 13 superannuation funds deemed to have failed the Australian Prudential Regulation Authority (APRA) inaugural performance test in August are now in the throes of amalgamating and four others are subject to impending major commercial transactions.

Barely four months after APRA named the funds on its list of failures, the following funds are now merging or about to announce they are:

Australian Catholic Superannuation Fund is merging with UniSuper

LUCRF is merging with AustralianSuper

Victorian Independent Schools has merged with Aware Super

EISS Super has short-listed a merger which expected to be with Cbus

BOC Gases Superannuation has conducted an outsource exercise

Maritime Super had previously outsourced investment management to HostPlus

On top of this, Westpac’s BT has signalled that its superannuation and platforms business are on the market, something which might address the issues around the failure of the BT Super MySuper product, while also taking care of the Asgard Employee MySuper product.

Westpac has been issuing consistent signals around the consolidation and sale of its superannuation and platforms business, listing them as sale items scheduled for disposal in 2022 earlier this year and again in an investor briefing on 1 November. It has reinforced that time-table.

The consolidation of the Westpac/BT superannuation and platforms business has occurred progressively over the past 18 months via a roll-in to BT Panorama.

At the same time, as one of its first moves after separating from the Commonwealth Bank, Colonial First State (CFS) has announced zero administration fees on its FirstChoice Employer Super product which it believes will help it fall on the right side of the ledger in the next APRA performance test exercise.

Among the remaining superannuation funds on the APRA failed list are AMG Super which has recently launched a new platform which it is marketing as a viable alternative to a self-managed superannuation fund, which Christian Super with its My Ethical Super has canvassed the possibility of a merger.

Executives and consultants dealing with the superannuation fund merger discussions have told Financial Newswire that the Australian Prudential Regulation Authority (APRA) has made clear to them it does not favour and will not endorse mergers which do not generate sufficient scale.

“Lesson have been learned from the failed efforts by EISS Super to merge with TWUSuper and no one is prepared to go down that path again,” one consultant said.