The chief executives of Equipsuper and Non-Government Schools Super have thrown their support behind SunSuper’s acquisition of all three funds’ administrator, CSA Retirement Services (formerly Citistreet), although some industry observers wonder for how long.
Equipsuper CEO Robin Burns said his 50,000-member fund’s contract with CSA did not run out “for a long time” and would not be reviewed before it did. He played down any concern that Equipsuper would effectively be administered by a competitor super fund. “Yes we are both public offer funds but we’ve got different niches and strengths in different parts of the country.
Admin is really there as the support for all the other different things you can do for your members, and in fact I’ll think we’ll be better served by having an administrator that’s dedicated to the same business that we are in,” Burns said. “[Prior to ING] the ownership of CSA was of course a joint venture of overseas parents which created a degree of uncertainty.” Burns said Equipsuper was no stranger to having its administration run by an organisation that also competed with it, pointing out that Mercer was the incumbent prior to CSA and that its service had not been compromised.
NGS Super CEO, Antony Rodwell-Ball, said his fund had a strong relationship with CSA – “there have been moments but the last 12 months in particular have been good” – and he was confident SunSuper would stand by its contractual obligation to provide it the best service possible. However Frank Gullone, the former boss of Superpartners who now runs consultancy Gullone Group, predicted the two ‘external’ clients would soon “be dusting off their contracts and seeing what they can do”.
Gullone said that future system changes at CSA would inevitably be governed by Sun- Super’s needs, and the ‘external’ clients would not enjoy the input they once did, unless the Queensland-based fund decided it genuinely wanted to join the third-party administration business. SunSuper CEO Tony Lally was unsure on that point last month, saying the fund had not decided whether it would attempt to grow CSA’s client base after the purchase from ING finalises around the end of the month.
However Lally said CSA had been purchased as a genuine direct private equity investment for the fund, and not merely a means of providing certainty over administration provision. He emphasised the cost savings that would arise from bringing SunSuper and CSA Retirement Services under the same umbrella, and said “not a lot of attention” had been paid to future client acquisition.
The composition of CSA’s board and senior executive had also not been finalised pending finalisation of the purchase, however Lally said there was little overlap between the two businesses and he expected few job losses overall.