Super funds merge under special licence

Danny Casey (Catholic Super)

Catholic Super and Equipsuper will formally launch their $26 billion joint venture today and have begun discussions with other funds that could expand the assets under management. Source: The Australian.

The prudential regulator approved the funds’ MySuper products last week, ahead of today's first meeting of the revamped trustee board that includes seven Equip directors and five from Catholic Super.

“There’s a lot of pressure on the industry to merge and our model could be a pathway for others to follow,” Catholic Super chairman Danny Casey said.

“A number of people have expressed interest and engaged in dialogue to understand the model more clearly or to join us.”

Equip, which was founded in 1931 to serve Victorian electricity workers, is the only not-for-profit fund to hold an “extended public offer” (EPO) licence from the Australian Prudential Regulation Authority.

The licence enables Equip to be the trustee of multiple funds, similar to Westpac being a home to banking brands such as St George Bank, Bank of Melbourne and BankSA.

One of the attractions is that merger benefits can accrue from day one under a single trustee and management team while preserving the heritage of the individual brands.

The joint venture recruited Computershare executive Scott Cameron in August to lead Equipsuper and Catholic Super.

Mr Cameron, who will be chief executive of the joint company as of today, took up his position last month — the first time in Australia that two super funds have had the same CEO.

APRA chairman Wayne Byres said last month the $3 trillion super industry was not delivering the right outcomes, as noted by the Productivity Commission.

“Trustees have not always been focused on members’ best interests. Aggregate fees and costs are too high, insurance has not always been good value for money and there has been too much inefficiency in the system,” Mr Byres said. “And (the PC) said — very loudly and clearly — that regulators should do more to hold trustees to account to address those issues.”

Legislation has given APRA much greater powers to facilitate mergers that are in members’ best interests.

Mr Casey said the EPO model had been around for a while but Equip and Catholic Super were the first to use it.

“It changes the assumptions around mergers and de-risks the merger process,” he said.

FULL STORY

Super funds merge under special licence (The Australian

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