The benefits of super funds merging
By Money Team
Consolidation among Australian superannuation funds continues, driven by regulatory changes and market forces. This is positive for members, providing super funds with the scale necessary to deliver efficiencies and enhance retirement outcomes.
An example is the merger between Mine Super and TWUSUPER, a strategic move that enhances the sustainability of the combined entity, Team Super.
"By pooling resources, Team Super will be better positioned to deliver lower fees, enhance investment returns, invest in technology and offer a broader range of services. The rebrand to Team Super is more than just a change in name," says Mine Super chief executive Vasyl Nair, who will head the combined fund.
"It is a symbol of the fund's commitment to championing Aussie workers and their retirement outcomes. This follows a transformative period for
Mine Super where our strong investment performance is just one part of a larger story of transformation," he says.
KPMG predicts there will be ongoing consolidation in the superannuation sector.
"Members can get good outcomes given how competitive these mergers are and the strength of the resulting superannuation businesses," says Linda Elkins, head of superannuation at KPMG Australia.
"The ongoing consolidation is likely to be driven by sustainability concerns, as superannuation funds deal with the need to increase their operational resilience and continually improve member services."
University of Sydney's Professor of Finance Susan Thorp says that members benefit from lower administration fees when fund mergers create economies of scale.
"Members of underperforming funds that merge with more efficient funds may pay lower administration fees if efficiencies transfer to the new accounts. These members may also feel more confident that their savings are being well managed," says Thorp.
She notes there are pros and cons when it comes to a superannuation fund's size.
"While greater scale may open up new investment opportunities for super funds, these opportunities do not always come with lower investment fees and higher returns," says Thorp.
"But as more members move into retirement, larger scale superannuation funds can develop the sophisticated decision supports and retirement products retiring members need," she adds.
For Mine Super, the journey to merge and increase its scale has been years in the making with the fund delivering a series of changes over recent years. This has translated into market-leading investment performance and the realisation of member benefits that make a real difference.
This includes a 25% reduction in the fund's fixed administration fee and further enhancements to the insurance offer and investments menu.
"Our part in the consolidation narrative is a really positive one," says Nair. "We're a great example of how two strong-performing funds like Mine Super and TWUSUPER can continue to enhance their offers and value to members, without losing their connection to members."
Superior retirement outcomes
Mine Super has a rich history spanning more than 80 years, serving the retirement needs of workers in mining and related industries. It was established with a deep understanding of the unique challenges and risks faced by these workers.
Over the years, Mine Super has grown and adapted, always with the focus on protecting and growing its members' retirement savings. The merger with TWUSUPER is testament to this commitment, as it allows the combined entity to offer enhanced services and even better returns, safeguarding members' retirement nest eggs.
"Superannuation plays a crucial role in supporting the retirement outcomes of Australian workers. It is designed to provide savings that can support individuals during their retirement years, ensuring they can maintain a reasonable standard of living without relying solely on the age pension," says Nair.
"Mine Super recognises the importance of offering products and services that align with the core purpose of superannuation."
This includes investment options that cater to members' risk profiles and life stages. Insurance appropriate for its members is key and Mine Super's insurance policies are tailored to the needs of workers in high-risk occupations.
While investment markets are inherently volatile, Mine Super maintains a long-term focus, understanding that the true value of superannuation is realised over decades. The fund's investment strategy is designed to weather market volatility, with a mix of growth and defensive assets that align with members' life stages. This ensures members' retirement savings are positioned for long-term growth, despite the inevitable ups and downs of the market.
"Mine Super has the scale and performance of a large fund, but it retains the personal touch and commitment of a smaller fund," says Nair.
"Our approach is rooted in a deep understanding of the industries its members work in, so the fund's products and services are tailored to their needs. This combination of scale and personalisation allows Mine Super to deliver exceptional outcomes for its members."
Empowering members
Education is a cornerstone of Mine Super's approach to supporting members. This is because the fund understands that some members, particularly younger ones, may not fully grasp the importance of superannuation or the power of compound interest.
"Compound interest is a fundamental concept in retirement planning, yet it can be challenging to explain to young people, who may be focused on immediate financial concerns. Mine Super tackles this challenge by using clear, simple language and real-life examples
to illustrate how small contributions can grow into substantial retirement savings over time," says Nair.
Through on-site seminars, workshops and digital resources Mine Super aims to demystify super and empower members to take control of their retirement savings. The fund's team regularly visits work sites and industry events, delivering seminars and one-on-one consultations. "This boots-on-the-ground approach ensures education is accessible and relevant, helping members to make informed decisions at every stage of their working lives," says Nair.
Mine Super gives members access to financial advisers who can help plan retirement outcomes.
"We believe in the value of advice and the role it can play in helping members achieve the retirement outcome they deserve. As we increase in scale, we remain committed to ensuring advice remains accessible to our members, wherever they live," says Nair.
Move towards sustainability
Mine Super's investment performance has been positive over recent years and the fund is optimistic that with increased scale it can continue to deliver strong results for members.
Building on the performance success of recent years reflects strong product design and an investment strategy that is regularly monitored, with the fund agile enough to pivot when needed.
"The rebrand to Team Super is a powerful statement of the fund's purpose and values. It reflects Mine Super's long-standing heritage in the mining industry and its commitment to supporting workers in high-risk occupations. It solidifies Mine Super's position as a champion for Aussie workers, dedicated to protecting and growing their retirement savings," says Nair.
The consolidation of the super sector is a trend that is set to continue, driven by the clear benefits it offers to fund members.
This report is sponsored by Mine Super. It was independently researched and written.
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