Twelve not-for-profit super funds were chosen under the Federal Government's award modernisation program. AustralianSuper and Sunsuper were nominated in seven awards. REST and Hostplus were nominated in four awards.
AMP was the only retail fund that received a nomination.
Key industry groups reacted swiftly to the decision. The Investment and Financial Services Association (IFSA) and the Association of Superannuation Funds of Australia called for a review of the decision.
IFSA noted that such a decision would reduce any competition in the industry.
But while retail funds may be uneasy about being shut out from the awards, the move does highlight the implications for smaller industry funds. As one industry chief quipped to me, the AIRC decision could "squeeze smaller funds like us out of the market".
AustralianSuper, Sunsuper and REST are among Australia's largest funds. Minister for Superannuation Nick Sherry has already foreshadowed the need for more fund mergers.
The Government's decision to provide an optional capital gains tax (CGT) rollover for capital losses arising from CGT events in mergers could drive further consolidation in the industry.
Sherry has also turned his attention back on the issue of fees and some argue larger funds can bring down the cost of their fees structure simply because of their size.
Industry funds, as their name suggests, represent industry and therefore their roots are occupation-based. For some of these smaller funds, their member retirement needs are based on their occupation and may not necessarily be met by larger funds.
Commenting about mergers in the past, Media Super chair Gerard Noonan said the work of journalists can be freelance-based and as such his fund's retirement plans cater for these ad-hoc work patterns.
Competition is set to intensify as the year looks set to bring another period of rolling negative returns.
The industry fund's Compare the Pair campaign successfully differentiated industry funds from their retail counterparts.
Whether members will look at comparing industry fund with industry fund could depend on whether the size fits their needs.
