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GNGB guide warns super funds on hidden risks in fund transfers
Super fund mergers are rising, but poor planning during successor fund transfers has left members and employers exposed to serious risks.
The Gateway Network Governance Body (GNGB), the industry-owned not-for-profit managing the Superannuation Transaction Network (STN), has published a new guide to help super funds better manage successor fund transfers (SFTs).
CEO of GNGB, Michelle Bower, said that with super fund consolidation increasing, SFTs – where members are moved from one fund to another – have posed growing challenges for funds, employers, and members, with several problematic examples already occurring this year.
“SFTs are administrative and so are largely out of sight, out of mind – but when things go wrong, they have impacts all the way to the individual account holders,” she said.
“The good news is these issues can be solved with more collaboration and planning, so we put together a guide to help funds identify and address all the common pitfalls upfront, ensuring members and employers don’t experience any adverse consequences.”
The guide, Managing the hidden risks of Successor Fund Transfers, details the technical risks often overlooked during SFTs. Common planning errors during SFTs continue to expose funds and employers to avoidable risks, according to GNGB.
One frequent mistake is delaying updates to the Fund Validation Service, which forces gateway operators to work under pressure and leaves employers without the information they need to make timely superannuation guarantee contributions.
The guide also outlined poor communication is another widespread issue, where relying on a single channel or expecting members to inform employers often leads to confusion and employer unawareness.
Timing also plays a critical role. Transitioning during peak periods, such as around superannuation guarantee quarterly deadlines or the end of financial year, adds unnecessary pressure to systems already under strain.
Lastly, neglecting the technical underpinnings of the STN in favour of internal fund accounting priorities can result in expensive remediation and system integrity issues.
Failure to manage these risks has commonly led to super contributions being refunded to employers, GNGB stated.
With payday super coming into effect in July 2026, such failures could leave employers liable for penalties, even when they have fulfilled their obligations.
According to the organisation, fund members have been affected as well, as poorly executed transfers have prevented individuals from accessing their online accounts, leading to surges in calls from members who feared their superannuation had been hacked.
“Good SFT planning is really a critical requirement as the industry faces both increasing cyber pressure, and the move toward much faster superannuation payment cycles on 1 July 2026,” Bower said.
“There is so much going on during these types of transactions that it’s easy to overlook the admin side, but from both a reputational and regulatory perspective, it’s really important for funds to get it right.”
Bower also noted a financial incentive for early action: “By ticking all the technical boxes early in the process, funds avoid having to do remediation after the fact – a process that can be costly as well as disruptive.”
AUTHOR
Adrian Suljanovic
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