The Australian Prudential Regulation Authority (APRA) has announced additional licence conditions on Christian Super that will force the super fund to merge with a “larger, better performing” fund by July next year.
The prudential regulator said the new conditions were designed to address the super fund’s underperformance and concerns about its investment oversight, governance and strategic decision-making.
“Christian Super has a legal obligation to protect the best financial interests of its members,” said APRA member Margaret Cole.
“In light of its ongoing underperformance, APRA’s assessment is that the optimum way for Christian Super to do this is to move its members to a better performing and more sustainable product as soon as possible.”
The fund is required to implement a strategy to merge by 31 July next year and must report to APRA if the merger is not completed by this date.
Under the additional licence conditions imposed by the regulator, Christian Super must engage an independent expert to ensure the merger takes into account the best financial interests of its members and is consistent with its duties under superannuation law.
“These new licence conditions are designed to set out a clear path for Christian Super to achieve this, while also ensuring the trustee obtains independent advice and reports to APRA on its progress before making a go-ahead decision for these members,” said Ms Cole.
In response to APRA’s announcement, Christian Super said it would work with various stakeholders including the prudential regulator as it explores options for a “possible merger”.
“We’ve been exploring collaboration opportunities with peer funds for some time, because a bigger fund, with more members and pooled savings, could potentially deliver important scale benefits to our members and their retirement,” said Christian Super CEO Ross Piper.
“As we continue this process, our members’ values will remain a key consideration for us, recognising that fees and returns are important but are not the only reason Australians choose their superannuation fund.”
Jon Bragg
Jon Bragg is a journalist for Momentum Media's Investor Daily, nestegg and ifa. He enjoys writing about a wide variety of financial topics and issues and exploring the many implications they have on all aspects of life.
