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Cooper continues pressure for fund mergers
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| Jeremy Cooper
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Superannuation funds will remain under pressure to pursue scale through amalgamation if the chairman of the Cooper Review, Jeremy Cooper, has his way.
Cooper has used a speech this week to the Committee for the Economic Development of Australia (CEDA) to restate his view that the pursuit of scale in the superannuation industry will drive greater efficiency and therefore lower fees.
Citing a Deloitte report commissioned by his review panel, he said it provided empirical data that scale matters in super.
“Specifically, the Deloitte report showed that a member with an account balance of only $25,000 in super would be paying around $200 a year and in some cases less than half that in total costs under the MySuper proposals,” he said.
Cooper said the Deloitte report had shown once again the power of economies of scale in reducing per member investment and operating costs.
However, Cooper acknowledged that there were impediments to achieving that scale and cited instances where fund mergers had not occurred because boards could not agree on matters as relatively trivial as the name of a fund or the number of trustee directors.
“More seriously though, there are systems issues, taxation issues and legal technicalities that can hinder efficient mergers, and the review is looking at solutions to some of these,” he said.
AUTHOR
Mike Taylor
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