Mr Noonan said the fund had $550 million in cash and insisted the merger was not an indicator it was in trouble. He said consolidation would give members greater investment opportunities. “By increasing our size, we can provide access to a greater range of investment opportunities and provide a better deal through cost savings, potentially reducing the investment fees,” he said.
Cbus chair Steve Bracks said it was important for the funds to retain strong ties to members.
“For 35 years our fund has had a strong bond with our members,” Mr Bracks said. “This affinity with our members has built a strong level of trust in the fund. Media Super has a very similar history and connection with their members.”
The super sector has increasingly been under pressure to consolidate. APRA told poor-performing funds to merge or exit the industry in May and Assistant Minister for Superannuation Jane Hume said last month COVID-19 had exposed structural weaknesses in the retirement savings system and there was now an urgent need for more funds to merge.
APRA oversees more than 40,000 superannuation products at 185 funds and critics say this fosters chronic under-performance through the sector.
Senator Hume said the government was “greasing the skids” for greater consolidation. “The Productivity Commission made it abundantly clear that mergers of underperforming funds would improve retirement outcomes,” she said.
Mr Noonan said Media Super’sinvestment in Australia’s film industry and collection of ancient instruments would be maintained. “There are various ways of protecting these investments, you don’t need someone on the board itself,” he said.