2022 to end with 20 fewer super funds in prospect

Mike Taylor

Managing Editor/Publisher, Financial Newswire

30 November 2022

Australia looks set to end 2022 with just over 20 superannuation funds having either merged or in the process of doing so.

In what reflects the policy approach of the previous Liberal/National Party (L/NP) Coalition Government and the active encouragement of the Australian Prudential Regulation Authority, 17 funds have already merged or started the process while Financial Newswire is aware of at least two more mergers likely to be announced before Christmas.

While there remain hundreds of superannuation products regulated by APRA, the exit of the 20 funds this year will bring the number of significant funds to fewer than 120, with the bulk of assets held by fewer than 30 funds, 80% of which are industry superannuation funds..

The measure of the impact of the mergers is that  the most recent APRA data reveals that as of this month there were 92 MySuper products in the market and that includes the recently-launched Vanguard Super.

However, importantly, major players such as AMP and Mercer have multiple MySuper products in the market.

A number of mergers have taken well over 12 months those which have been completed or are currently on foot are as follows:

Australian Ethical and Christian Super

AustralianSuper/ClubPlus/LUCRF

Cbus and Media Super

Equip Super/Catholic Super/BOC Super

First State Super/Vicsuper/WA Super/VISSF SUPer

Hostplus/Intrust/Statewide

LGIAsuper/Energy Super

Sunsuper and Q Super

Tasplan and Spirit Super

Active Super and Vision Super

AvSuper and CSC

Brighter Super and Suncorp Portfolio Services

CareSuper and Spirit Super

EISS Super and Cbus

HESTA and Mercy Super,

Hostplus and Maritime Super

Mercer Super and BT Super and Lutheran Super

UniSuper and Australian Catholic Super

While APRA deputy chair, Margaret Cole in September said the regulator had not actually sought to determine how many funds would continue to be in existence in five years’ time, she pointed out that five years’ ago there were 200 APRA-regulated funds.

What is more, she said that at the end of 2021 there were 141 funds of which 110 collectively managed 10% of assets.

At least four merger announcements have been generated by funds which failed the YFYS performance test. The Government has ordered a review of the performance test methodology to determine whether it is fit for purpose.