Jones says Govt comfortable with super fund mergers

Oksana Patron

7 September 2022

The Federal Government has signalled it has no problem with the pace of superannuation fund mergers and it does not believe mergers risk creating an oligopoly.

The position was made clear by the Assistant Treasurer and Minister for Financial Services, Stephen Jones to the Conference of Major Superannuation Funds, in Brisbane.

Commenting on the consolidation and mergers going on within the superannuation industry, Jones said that it was “a good thing”, adding that the impact of the YFYS regime accelerated the trends and discussions already happening within in the industry with regards to consolidation.

“Whenever you have a conference such as this and [..] superannuation trustees get together there is always going to be discussion around the issues of fund mergers,” he said.

“For the most part, I think, the consolidation that has gone on in the industry is a good thing. I want to be a very clear about that, fund mergers that have occurred, particularly the mergers that have been driven, by performance, assessment, process, have been a good thing.”

“There has been some talk about replication, of sort of concentration that we are seeing in the banking industry and concepts of ‘too big to fail’

“I just want to make this point we are a long way from replicating in superannuation industry sorts of concentration we see in the banking sector so […] I am not concerned about that.”

However, the question around the implications for market’s structure around “accelerated and excessive mergers” within the industry has been included in the consultation Your Future, Your Super performance test consultation paper.

“I can advise your conference that this week we will be releasing the consultation paper and formally commencing the consultation with stakeholders on the Your Future Your Super regime.

We are particularly focused on the benchmark process and I want to me it quite clear to this group as I have said it for the last 12 of months that Labor government supports performance measurement,” Jones said.

The minster stressed that his party is also “unequivocally on the side of high performing funds” and would ensure they delivered on their performance promises.

Jones also said that this week will see the introduction of the final raft of legislation implementing the recommendations of the Hayne’s Royal Commission.

“We want to be finishing up this year saying all of the legislation to implement the Hayne recommendations has been done and we are on track to do that,” he said.