Retirement
Another retail super fund bites the dust
The “merge or die” mandate for super funds has claimed its next victim.
Another retail super fund bites the dust
Another retail super fund is admitting defeat, with the Credit Union Building Societies (CUBS) Superannuation Fund due to be wound up in March.
In a letter to members, owner Equity Trustees Superannuation Limited (ETSL) cited recent commercial and regulatory developments as the cause.
“Due to commercial and regulatory developments that impact the future sustainability of the fund, and having regard to the best financial interests of fund members, ETSL has resolved to terminate the fund on 1 March 2022,” the letter said.
ETSL said that the fund would cease receiving contributions from 4 February, with current pension payments to cease a week later.
Current CUBS Super Fund members will have until 1 March to inform the fund of where they’d like their account balance to be transferred.
CUBS is only the latest retail fund to admit defeat amid growing consolidation across Australia’s superannuation landscape.
Last year, APRA executive board member Margaret Cole said that retail funds like CUBS have historically been able to avoid scrutiny “thanks to gaps in APRA’s data collection, and a bewildering array of products and options that makes comparisons difficult”.
However, with the arrival of the regular performance tests introduced by 2021’s “Your Future, Your Super” reforms, this era is now at its end.
“For funds struggling with poor performance or lack of scale, these changes will only increase current sustainability pressures,” Ms Cole predicted.
Beyond considering the benefits of a merger with another larger fund, Ms Cole urged smaller retail funds to consider the benefits of consolidating their own product lines.
“It is common for retail trustees to operate a number of products across multiple funds – noting that each of these individual products is subject to the critical scrutiny of the performance test and APRA’s heatmap,” she said.
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