The NSW Government's plan to sell Pillar, its superannuation administration business, may lead to higher fees for members, according to SuperRatings managing director Jeff Bresnahan.
"There has been a distinct lack of profitability in the sector for a number of decades that needs to be shifted," Bresnahan said.
"The sale of Pillar will allow the administrators to implement a number of fee increases in the short-term, which will quite clearly flow through to Australian superannuates."
Bresnahan said another effect of the sale would be a reduction of competition in the industry.
"It is potentially the second of the four administrators to be sold in the last month, so it looks like we will be down to a duopoly," he said.
Australian Government Employees Superannuation Trust, Media Super and Prime Super are among the funds Pillar administers.
"Some of the funds that are run by Pillar are extremely confidential and need to be cared for very carefully, as many are public service funds." Bresnahan said.
As a precondition of the sale, there will be no job losses at Pillar's contact centre at Coniston (near Wollongong).
"I would be surprised if any new owners took immediate steps to change the set up at Coniston, as it has the lowest staff turnover industry wide... that has helped with their provision of service over the last five years," Bresnahan said.
Pillar has 1.7 million members across the funds it administers, and more than $59 billion in funds under management.
Pillar's sale was approved by cabinet's budget committee last week, with the possibility of a deal by the end of next year.
