Super mergers will cut member fees LGIAsuper chief executive Kate Farrar says superannuation fund mergers should deliver notable fee cuts to members.
Money by Joyce Moullakis
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Subscriber only LGIAsuper chief executive Kate Farrar says superannuation fund mergers should deliver notable fee cuts to members, and she expects the new average size for a boutique fund will swell to between $30bn and $50bn. Merger activity has been ripe in the $3 trillion superannuation sector, amid regulatory pressure on performance, fees and governance and a push for scale benefits. Brisbane-based LGIAsuper, which began looking after the retirement savings of Queensland s local government employees, is part of that merger trend. In a deal that will become effective on July 1, it has agreed to tie-up with Energy Super and create a $22bn fund.
Australia’s superannuation regulator calls for more, better consolidation
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Australia s outgoing top regulator for superannuation funds called for continued and more efficient industry consolidation, in pursuit of economies of scale.
Helen Rowell, deputy chairwoman of the Sydney-based Australian Prudential Regulation Authority, in a speech Wednesday to the Australian Institute of Superannuation Trustees, said, Larger funds are better placed to deliver stronger investment performance and lower fees, with scale an increasingly important determinant of member outcomes.
Speaking just over a month before she s set to hand off responsibility for superannuation oversight, after eight years, to APRA member Margaret Cole and take up oversight of Australia s insurance industry, Ms. Rowell noted the considerable progress in consolidation during her tenure.
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