Superannuation funds are apprehensive over what the Cooper review's MySuper proposal will signify for them and their members, according to Mercer.
"A number of our clients are really concerned about what MySuper will mean for their fund and what it will mean for their members," Mercer managing director and market leader for Australia/New Zealand David Anderson told InvestorDaily.
"Unless Cooper unveils some magic pot of money of where these changes can be funded from, then MySuper will actually cause an increase in cost at implementation."
Mercer has a number of large superannuation fund clients that are not only concerned about the rising costs of implementation of MySuper, but also worried about competing in a MySuper market place.
"But as well as that, they're concerned about absorbing the costs of being ready to compete in a MySuper market place," Anderson said.
"These funds are all the large ones that I've spoken to, but I imagine the really small super funds are starting to consider their future because it will be a significant cost for them and they'll have to compete."
One of Australia's largest industry funds, AustralianSuper, has been conducting comprehensive modelling in order to respond to any of the likely scenarios that could eventuate from the MySuper reform.
"We don't know what MySuper will lead to. But it will lead to change providing the Government responds to that report. We are preparing ourselves for all range of scenarios and we've been doing that scenario testing and we're able to do that because of our size and scale," AustralianSuper general manager of growth and new opportunities Paul Schroder said.
"We welcome the likely direction that's being talked about here in regards to thinking about the results for the member and lowering costs, but it is inevitable that it will lead to extra efforts and extra costs on the part of funds as they adjust.
"Fortunately we're in a position to be able to accommodate those costs and those variations into the new environment."
The Cooper review handed down its report to Government yesterday.
"The Government will consider the report and will make its own decision concerning the timing of its release and the response to the recommendations made in the report," a statement from the Cooper review said.
