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No compulsion to merge
The chair of the peak consultative group for the government’s Stronger Super reforms, Paul Costello, has sought to reassure the super industry that smaller super funds can survive the reforms without needing to merge with a larger fund.
Speaking at an Association of Superannuation Funds of Australia breakfast, Costello said that he would make sure that smaller super funds didn’t feel forced to merge with each other to manage the different super reforms.
“There is a concern that you can only be good at this game if you are large. I don’t think that is a correct statement, and I would be very, very careful to ensure that that’s not the message that comes through,” Costello said.
Smaller super funds that were feeling challenged by the reforms should think about bringing in more resources to manage the changes, or consider “teaming up” with other super funds to apply themselves to those reforms, Costello suggested.
“What matters for a super fund is the consistency and stability of net returns. You do not have to be large to do that, you can be excellent and small. If that comes at a slightly higher cost, but you can manage that through what you deliver, then assuming that you no longer deserve to be in business would seem unusual,” he said.
Costello also told the audience they needed to stop getting hung up on the small details of the superannuation reform, saying they were open to negotiation with the Government.
Many super funds had rushed off to point out inconsistencies with the reforms when they need to put aside posturing and create a constructive consensus for the Government, he said.
“We need to stop sweating the small stuff and focus on the big picture,” he said.
AUTHOR
Mike Taylor
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