Although some funds will lose out when automatic consolidation of superannuation accounts takes place, it is a logical step to take, according to First State Super.
"Auto-consolidation is based on a simple principal that we've got 30-odd million accounts and that we've got fewer than 10 million workers," First State Super chief executive Michael Dwyer said.
"Does that make sense? I think that most of us . will say: 'No, that doesn't make sense'. We are carrying too many extra accounts," he said.
But people are too busy to spend a couple of hours consolidating their accounts and, therefore, it should be done automatically, Dwyer argued.
"It is logical, I think, that we as an industry think that auto-consolidation might be a very good thing. But at the end of the day, if you've got a million members and you halve that through auto-consolidation, somebody has got to pay the piper," he said. "But that is not a reason not to do it."
Auto-consolidation of super accounts, where members with multiple accounts will be automatically rolled into their active account, has become a point of fierce debate.
Retail funds have, from the start, argued against the measure, but Dwyer said also small funds would feel the impact.
"Auto-consolidation will have an impact, when it eventually happens, on the industry and on the ability to run smaller funds, I would suggest," he said.
Dwyer, who made the comments at the IQPC Merger and Acquisition for Super funds conference yesterday, said large funds were better able to sustain shifts in their member base.
First State Super announced plans to merge with Health Super in November last year, creating a $28 billion super fund with more than 800,000 members.
Dwyer said that although there is a place for small funds in the industry, large funds will have a number of distinct advantages going forward.
"We think the scale we now have delivers better value to members, both in terms of fee level and product offering," he said.
"We also think it will give us a louder voice in the industry. Having close to 800,000 members, it is important that those members have a voice via us on their retirement savings."
Finally, having scale will soften the impact of the changes in regulations, he said.
"We believe that a larger scale will protect our members from a lot of the changes - which in a lot of cases will be appropriate changes, but nonetheless will cause some cost pressure on members," he said.
Dwyer said over the next 12 months, the funds will look at whether to continue with a multi-brand strategy, or whether it will drop the Health Super brand.
