More fund mergers expected

Most superannuation fund executives and trustees believe superannuation fund mergers will continue, with the main driver being the pursuit of scale benefits. 

The latest Super Review/Pillar Administration survey conducted during the recent Conference of Major Superannuation Funds (CMSF) has revealed strong agreement on the likelihood of further superannuation fund mergers. 

The survey revealed nearly 95 per cent of respondents, at least half of whom were superannuation executives or trustees, expected that further fund mergers would occur. 

However, just as importantly, the survey revealed that respondents believed scale benefits generating lower costs and fees were the primary motivating factor such mergers, with few believing mergers resulted in better investment performance or greater security. 

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Indeed, the survey respondents indicated that they believed that beyond scale and cost efficiencies, the second most likely benefit to flow from a merger was a higher level of service to members.