Cost and regulation major motivators for Perpetual on super

ANALYSIS

In the space of just a week, two major institutions have moved to reduce the costs which go with being a superannuation fund trustee – first it was Insignia Financial via its technology and administration deal with SS&C and then Perpetual by “retiring’ its trustee status.

The decisions taken by Perpetual and Insignia are a reflection of the significant regulatory obligations which go with being the trustee of a superannuation fund and the consequent costs of fulfilling those obligations.

In both cases, Perpetual and Insignia have moved to outsource responsibility to specialist firms – in Perpetual’s case its trustee status to Equity Trustees and in Insignia’s case its administrative and technology burden.

The decisions are, to a greater or lesser extent, a reflection of the way in which factors such as the Your Future, Your Super superannuation performance test and the Australian Prudential Regulation Authority (APRA) heatmaps are playing into boardroom thinking.

Perpetual told members of its Perpetual Select Super Plan and its Perpetual Select Pension Plan that the decision to retire as trustee and appoint Equity Trustees as trustee “follows a comprehensive review and has been made after considering the best financial interest of our members”.

“The decision is aimed at leveraging the specialist expertise and extensive resources of ETSL, which is one of Australia’s largest specialist trustee companies,” the letter to members said.

“ETSL operates as the trustee for a number of funds, bringing significant benefits such as economies of scale, strong governance, and access to a broad range of resources,” it said.

Perpetual then went on to say that it would continue to provide specialist investment management services to the fund, adding “In addition, Perpetual, through Perpetual Investment Management Limited (PIML), will continue to provide administration services, while the safe custody of assets will continue to be held by a specialist custodian on behalf of members”.

It told members that they did not need to take any action.

“Your account will continue to operate under the new trustee. Importantly, there are no changes to the features of the Fund, including the investment options and insurance offered, fees charged, pension payment arrangements, contact details, or the website as a result of the change of trustee,” it said.