APRA not fixated on super fund scale

The Australian Prudential Regulation Authority (APRA) does not hold a fixed view on what represents an appropriate size for a superannuation fund, according to APRA deputy chair, Helen Rowell.

On the same day that participants in a Super Review roundtable argued strongly that there should be no compulsion to merge on the part of small or medium-sized funds, Rowell told a panel discussion at the Association of Superannuation Funds of Australia (ASFA) conference that the regulator was not pressing an amalgamation agenda.

Her comments came after the chief executives of two smaller mid-sized funds, Legal Super and EISS Super told a Super Review roundtable that bigger was not necessarily better.

LegalSuper's chief executive, Andrew Proebstl said it was not just about getting bigger, it was also about getting better.

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What is more, he said mergers only worked in circumstances where "the right funds get together with the right funds".

"Growth for growth's sake is not necessarily going to get the right outcome," Proebstl said.

"It is not all about just getting bigger. It needs about getting better."

Further, he said that the discussion around mergers should not be narrowly focused on smaller funds and should encompass larger and mid-sized funds as well, particularly those inclined to take on more risk via internal investment management.

EISS Super chief executive, Alex Hutchison, said having diversity and being competitive was important.

"Scale for scale's sake is not important," he said

"So long as you are providing value to members — that's what matters."

Hutchison acknowledged that there were benefits to being a big fund, but said that this was more than matched by smaller entities having the right value proposition and delivering to members.

He said that, in those circumstances, "scale is a meaningless debate in and of itself".