Fresh from exiting the business, Citistreet chief executive Stuart Korchinski predicts there will eventually be only one provider of administration of stand-alone corporate superannuation funds in Australia.
“It’s a business which requires a lot of tailoring, it’s hard to scale up in and you really need to be dedicated to it. It may eventually get to the point where only one organisation can make it work,” Korchinski commented after Citistreet’s early withdrawal last month from its contract to administer Watson Wyatt’s stand-alone corporate super fund clients. IBM Superlife took over the contract, covering 41 funds with 66,000 members.
The migration of the Watson Wyatt clients on to Citistreet’s Omni system would have been a 12 month process, Korchinski says. It was decided that resources were better directed towards potential new retail master trust and industry fund business. “Now that people have Better Super up and running, we think there will be a lot of activity from funds reviewing their administration arrangements.”
A third-party adviser to super funds on investment and administration arrangements, Warren Chant of Chant West Financial Services, said he doubted that IBM Superlife, or any other organisation, would gain a monopoly on admin for Australia’s corporate super funds. “While ever Mercer administers its own master funds, I can’t see them giving up administration for their corporate fund clients,” Chant said.
