M&A activity increases trustee duties

KPMG has highlighted the duties of superannuation trustees to manage risks on their funds in world of increased M&A activity.

The organisation said it was critical that trustees ensured they had robust governances and oversight models among four aspects.

These were governance & oversight, trustee stakeholder representation, risk assessment and assurance across the merger life cycle.

“The merger process requires robust and clear governance arrangements to ensure gaps in activities are identified as well as flag any duplication of effort.

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“We recommend trustees undertake an integrated merger risk assurance strategy and plan. This will allow informed decisions and awareness of the types of assurance the merger will obtain during various stages of the project, from real-time assurance through to go/no-go live assurance.”

There were two types of merger risk assurance activities; pre-merger and post-merger. The pre-merger activity involved reviewing the governance programme to support a successful merger, including the committee structure, working groups, stakeholder management, adequacy of resourcing risk and issue management processes.

Post-merger activities included reviewing business rules configuration, ensuring transactions were processed in accordance with agreed business rules, staff were clear on any governance changes and their roles and responsibilities.

Using these types of plans would allow for funds to have clear actionable recommendations for the executive and board and reduce ‘assurance fatigue’ as well as costs, KPMG said.