Millennial super fund Zuper to close its doors next month
Having failed to reach sufficient scale, the millennial superannuation fund Zuper will close its doors next month.
Closed to new members as of March 10, existing Zuper members have now received word that the offering will cease to exist from April 30 - just shy of three years since its launch.
Notifying members, Zuper's trustee Diversa has determined it is in the best interests of members to close Zuper.
"There has been a significant increase in the amount of regulatory change introduced by the federal government and regulatory bodies over the last few years," Diversa said.
"These changes have increased the complexity and cost of administering superannuation funds resulting in potentially poor outcomes to members where there is insufficient scale."
If members do not act before April 30, all Zuper accounts will be transferred into LESF and Macmahon Super.
Zuper is a sub-plan of OneSuper, which remains open. OneSuper was formerly known as Smartsave Members Choice Superannuation Plan. It was previously a sub-plan of LESF Super which merged with OneSuper in July last year.
At the time, Diversa - which was also trustee for LESF - said it was unlikely LESF and its sub-plans would reach sufficient scale to be viable in the medium to long term, with the merger intended to provide economies of scale.
Founded in early 2017, Zuper first launched in June 2018. At the time, its founders took on executive roles: Jessica Ellerm served as chief executive, Jon Holloway was chief product officer and Eran Thomson was chief creative officer.
All three have since departed, with Zuper acquired by RevTech Media.
Recent research by Rainmaker found disruptor super products, like Zuper promised to be, accounted for about $2.5 billion in superannuation assets in June 2020.
While it may seem small, this was up 44% since June 2018 - a growth rate seven times faster than that of the overall superannuation market. Still, such products only hold about 2% of millennials' super.
Most of the growth comes from Future Super, which has now amassed more than $1 billion in funds under management.
At the time of its last annual report in 2019, prior to the merger with OneSuper, Zuper had just $6.7 million in FUM.