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The crowding out of IT talent by the major banks is going to increase pressure on superannuation funds to maintain the quality of their front-line administration staff, and might even cause a super administrator to fail, according to Gerard Noonan, president of the Australian Institute of Superannuation Trustees.
Speaking at the AIST fund governance conference, Noonan, who is also the chairman of Media Super, said ensuring super funds acquired the highest quality front-line staff was going to be a big challenge for the industry in future years.
“The banks are doing so much work on IT that they are basically crowding out the market for competent IT people to work on anything at all, and there is a genuine shortage of talent in that IT area, and I do think that is something we are going to need to wrestle with across the whole administration area,” Noonan said.
“The fear of failure of a major administrator is something that just sits there, but if it happened it would be a catastrophe for us,” he said.
Hans Van Daatselaar, manager of strategy and client engagement at Superpartners, said he did not know how a consolidated industry of approximately 70 super funds (along the lines of the Cooper Review) would manage to gather the IT skill they would need if the banks were taking most of the resources.
Noonan said the requirement to understand administration systems was going to fall within the governance regime in the future, and boards needed to elect members who understood administration processes.
“Super trustees should have another think through audit risk and compliance risk when dealing with the issue of IT,” he said.
