POWERED BY MOMENTUM MEDIA
Mercer says corporate super needs outsourcing
Corporate superannuation funds should consider moving to a master trust agreement or outsourcing to survive the compliance and cost pressures of Stronger Super reforms, according to Mercer.
It said the introduction of Stronger Super reforms would hold corporate superannuation funds to the same standards as banking and insurance companies, essentially turning them into financial institutions.
David Anderson, Mercer's managing director for Australia and New Zealand said funds would need to significantly restructure to survive post the introduction of Stronger Super reforms in October next year.
He said superannuation funds would need to move to a master trust agreement to avoid having to become a financial institution or outsource its services.
"Mercer anticipates the polarisation of the corporate fund segment to accelerate over the next two years - with only the most committed funds continuing to evolve and compete and the rest deciding to outsource," Anderson said.
Funds would need to restructure internally and providing a MySuper account may require renegotiation of insurance contracts, and the revisal of fee structures, investment menus, forms, product disclosure statements and websites.
Anderson estimated the cost to Mercer of Stronger Super reforms will be up to $25 million over the next five years.
Mercer is developing more flexible services and governance models to meet the needs of large corporate super funds, the company said.
AUTHOR
Staff Writer
Money Management staff writers are writers who contribute to the website from time to time. If you would like to discuss the content contained within this article please contact us.
Recommended for you
Morningstar believes there is still further to run with the potential takeover of Insignia Financial even with original bidder Bain Capital walking away.
Insignia Financial has announced the status of the two private equity bidders as due diligence comes to an end.
The future of superannuation policy remains uncertain, with further reforms potentially on the horizon as the Albanese government seeks to curb the use of superannuation as a bequest vehicle.
Superannuation funds will have two options for charging fees for the advice provided by the new class of adviser.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
DomaCom DFS Mortgage
92.15 3 y p.a(%)
2
Global X 21Shares Bitcoin ETF
53.24 3 y p.a(%)
3
Global X GlobalX FANG+ ETF
43.15 3 y p.a(%)
4
DomaCom Shoreline North Coogee
36.26 3 y p.a(%)
5
GAM LSA Private Shares AU I
35.87 3 y p.a(%)
