Asset Super has increased competitive pressure within the superannuation administration sector this month by opting to open the provision of its back office administration to tender.
The move, announced on Monday by Asset Super’s general manager John Paul, will see 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 wrestle the Australian Government Employees Superannuation Trust away from SuperPartners.
That news prompted SuperPartners to point out that it had that in the past 18 months 12 of Superpartners’ 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.
“In the current competitive superannuation environment, the trustees expect to use the process both to test the market and to ensure that Asset Super members are being provided with a high quality, efficient administration service,” he said.
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.
