A dozen faith-based super funds have merged

Most of the Australian superannuation funds which could be regarded as “faith-based” have merged or are in the process of doing so.

While the Government contemplates treating faith-based products differently under the Your Future, Your Super (YFYS) superannuation performance test, an analysis of faith-based funds undertaken by Financial Newswire reveals that at least 11 of them have been the subject of mergers.

The Government has pursued the measure on the basis of it having been an election promise but it appears that only a handful of superannuation products are actually affected and mergers have made the picture complex..

The following represents the funds which could broadly be considered faith-based but which have been merged or are in the process of doing so:

Christian Super – Australian Ethical

UC Super (Queensland Uniting Church) – NGS Super

Catholic Super – Equip Super

Australian Catholic Super – Unisuper

Lutheran Super – Mercer

Sydney Anglican Super – Mercer

Melbourne Anglican Super – AustralianSuper

Uniting Church Beneficiary Fund – Mercer

South Australian Catholic Super – NGS Super

Queensland Catholic Super – Australian Catholic Super – Unisuper

WA Catholic Super – Australian Catholic Super – Unisuper

Adventist Super Fund – Sunsuper (which became Australian Retirement Trust).

The analysis shows that the only significant faith-based product which has not yet been subject to a merger is Crescent Super.

This suggests that for the Government to apply a faith-based approach, it would have to determine whether the faith-based investment principles were still being followed after the funds merged into larger entities.

The Government has tabled legislation proposing that faith-based products which fail the superannuation performance test be subject to a supplementary test recognising their specific faith-based investment criteria.

However, both the major industry superannuation funds lobby groups and the major accounting bodies have argued that faith-based products should not be treated differently, with both arguing that the issue should be resolved as part of the current review of the performance test methodology.

The Australian Institute of Superannuation Trustees (AIST) and Chartered Accountants ANZ have both argued that the faith-based approach should be considered in the context of the broader performance test review and that there are danger in treating them differently.

There are doubts about whether the Government’s legislative approach will gain the support of the Greens and the cross-benches in the Senate.