The pooling partnership between Hostplus and Maritime Super has been questioned by the Australian Prudential Regulation Authority (APRA) on whether it is in its members’ best interests, according to news reports.
A report by the Australian Financial Review said APRA chair, Helen Rowell, sent a letter to Liberal senator Andrew Bragg which said the regulator expected trustees, particularly of a fund making changes to its investment management arrangements, to show that the new approach was in members’ best interests.
“This applies not just to the specific management of its investments, but more broadly to any consequential changes that flow from them,” Rowell said.
“Should a trustee be unable to adequately demonstrate that members’ best interests are being prioritised in its decision-making, or it appears that a trustee may have failed to meet its obligations under RSE [Responsible Superannuation Entity] licensee law, APRA is prepared to take a range of actions to safeguard members.”
Bragg said Martime Super was a “shell company” for the benefit of the Construction, Forestry, Maritime, Mining and Energy Union (CFMEU).
“The idea of mergers is to create economies of scale and to reduce costs but also to remove persistent poor performers like Maritime Super,” he said.
“It seems inappropriate for poor-performing super funds to be put onto life support via a quasi-merger.”
The AFR noted that Maritime Super had been called out by APRA as an underperformer and had “languished” at the bottom of super league tables for years.
Maritime Super chief executive, Peter Robertson, said: “Our partnership with Hostplus will broaden investment opportunities for our members, lower investment management fees and realise other cost and scale benefits through access to a larger pool of assets”.
The partnership between the funds would involve Maritime Super’s $6 billion in funds under management to merge with Hostplus’ $44 billion, and Hostplus would make all investment decisions.