The 5 Key Considerations of a Fund Transition

With fund mergers, transitions and successor fund transfers dominating the superannuation industry over the next 5 years, we take a look at the 5 key considerations when undertaking a fund transition.

Superannuation is being hit with a record number of changes. The Productivity Commission is calling for the consolidation of funds, fewer member accounts and products, and increased reporting standards. The governments’ 2018 – 2019 budget is reducing duplicate member accounts by transferring inactive accounts with low balances to the ATO. All in the context of a fiercely competitive landscape!

Over the years IQ Group has provided transition capability, advice and quality assurance for many trustees and administrators. We have found there are several key lessons of a transition that parties often underestimate.

The five key considerations for beginning a fund transition:

1. Trustees are accountable to the member and regulators – Accountability can’t be outsourced. Trustees will ultimately be accountable to the member and regulators for a successful transition, merger or transfer. Trustees need to be very active participants in monitoring, aligning and controlling outcomes, and ensuring transparency and governance for key participants.
2. It’s always bigger and more complex than you think – This is the biggest project and organisational change initiative most funds will undertake. Even the funds that have undertaken a merger or transition are likely not to have done so for some time. This means the skills and knowledge are not usually readily available in-house.
3. Data is everything – Ensuring all data is transferred, tested, reviewed and reconciled is crucial. This is a significant task that requires extensive planning, coordination and oversight to make sure the move is seamless to the member. If done poorly, data remediation – and possibly compensation – will dominate the funds activities for some time.
4. Don’t forget the member experience – Most funds have spent considerable time and effort to provide a better digital experience for their members and improved insights into their member base. The digital experience is key to member engagement, so maintaining both the functional richness and availability through all devices is key.
5. It’s not over until it’s over – Transitions typically take much longer than most funds anticipate. Even when the transition occurs on the scheduled date, there are issues to resolve, outstanding tasks, systems and processes to tune and a backlog of work to resolve – not to mention normalising the new working arrangements and getting back into a business as usual rhythm. This process takes time, effort and commitment, and if not done properly the transition won’t be over any time soon. Think if it not like switching trains at the station, but rather moving your members from one moving train to another, it is all in constant motion!

IQ Group is uniquely positioned as the most experienced provider of transition and merger expertise for trustees and administrators. Transitions are complicated undertakings and often the largest project a trustee will undertake. IQ Group provides the expertise to minimise the delivery risk and ensures the member experience is seamless. IQ Group has a track record with each of providing transition capability, advice and quality assurance for trustees and administrators from due diligence to project closure.

If you are considering a transition, send through any questions or find out how we can help by contacting us at info@iqgroup.com.au, or calling +61 3 9225 4000.