Asset Super has increased competitive pressure within the superannuation administration sector by opting to open the provision of its back-office administration to tender.
The move, announced in late July by Asset Super’s general manager John Paul, will see existing supplier CitiStreet having to compete to retain the business against a field of players understood to include Pillar, Superpartners and Telstra subsidiary, Australian Administration Services.
According to Paul, the decision to go to tender was not generated by any dissatisfaction with CitiStreet but, rather, came as a result of the processes required by Asset Super’s compliance framework.
He said Asset Super’s compliance framework required an approved outsourcing policy — something which had generated the decision to initiate the tender process.
“Our administration contract is due for renewal at the end of December,” Paul said. “CitiStreet has been providing high quality administration services for Asset Super for the past three years and will be included as one of the short-listed service providers in the tender process.”
The decision by Asset to move to a tender process came only weeks after news that Pillar Administration had managed to wrest the Australian Government Employees Superannuation Trust away from Superpartners.
That news prompted Superpartners to point out that in the past 18 months, 12 clients had come up for contract renewal and, after market studies and negotiations, all of the funds had decided to continue their business with Superpartners.
Discussing Asset Super’s Tender decision, Paul made clear that it represented an exercise in testing market conditions.
Paul said the trustees would look to cull the shortlist to three within the next few weeks before a decision was made some time in September.
