The reasons for the departure of Paul Watson from Military Super, less than two years into his tenure as CEO of the $3.5 billion hybrid fund, remained shrouded in mystery last week.

The Canberra-based fund announced its new CEO would be Michael Seton, the Australian Government Employees Super Trust chief executive for thee past eight years. who had been fancied in super circles for weeks to become the CEO of Australian Reward Investment Alliance (ARIA).

Military Super and ARIA have a common independent chairperson, Credit Suisse veteran Tony Hyams, and their boards are slated to merge once the required legislation passes both Houses of Parliament, as is expected to happen during October.

Hyams would not be drawn last week on whether the trustee companies and secretariats of the two funds would also merge, effectively meaning Seton could become CEO of both.

He also did not rule out that Watson may be a contender for the ARIA CEO role, should such a position exist in its own right in future, saying only that the departed executive would “take a short career break before considering other opportunities”.

Hyams refused to say when Watson tendered his resignation, and some industry observers expressed surprise at the sudden and premature end to his time at Military Super.

Watson was unable to be reached for comment.

An interesting aspect of the appointment of Seton, FEAL’s Fund Executive of the Year for 2009, is that he apparently almost left the superannuation industry altogether. It’s understood he was close to accepting a senior executive position with the Australian Red Cross, before the Military Super opportunity presented itself. Seton could not be reached for comment.

Hyams said the Military Super CEO role was not advertised, because it did not have to be under Commonwealth guidelines, however he indicated the ARIA top job would be advertised, however that search was not yet underway.

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