What we have seen: Transformation in the superannuation industry

Since 2011 the superannuation industry has experienced large scale merger announcements across all sectors of the industry. The average consolidation transaction size has been steadily increasing over the past five years – from both a Successor / Receiving fund and Transferring fund perspective.

Following the activity of 2019 – 2020, characterised by mega, like-for-like, fund merger announcements, 2021 has seen a greater number of smaller funds consolidate into Australia’s largest incumbent superannuation funds.

Increased visibility of fund and product performance as a result of APRA’s MySuper Product heatmap (first published December 2019), the Annual Performance Test outcomes and other elements of the Your Future, Your Super legislation, has necessitated action from funds and encouraged the pursuit continuous improvement, and further consolidation across the industry.  

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Australian Superannuation Industry Merger Insights 2021

Download the full report to gain a fresh perspective on how the merger activities have impacted the industry as a whole.

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Reflections across the superannuation sector

Ongoing merger activity is a dominant theme impacting the superannuation industry resulting in material transformation across the sector. This is evident by large change programs being undertaken across the profit-for-member, public sector and retail funds. Indeed, much recent commentary, including our own, has focused on the drivers and key challenges many funds are facing into.

For the Superannuation Transformation & Consolidation Report in 2021, we have taken a fresh perspective on merger activity, learning directly from engagements across all superannuation industry stakeholders, including funds, administrators, insurers, investment custodians and members to provide insights into: 

  • Sentiment regarding fund consolidation
  • The importance of transaction readiness
  • Drivers of successful transaction execution
  • Challenges associated with consolidation
  • Members’ perception of consolidation outcomes

Industry stakeholders insights

Superannuation funds

Key themes:

What it takes to deliver a merger or SFT


Seven funds between $0.9bn–$182bn assets under management

Key reflections:
  • Starting with the end in mind
  • Importance of effective change management
  • Balancing the transactions and the core business
  • Developing realistic transaction timelines


Service providers

Key themes:

Navigating a challenging consolidation landscape


Administrators, insurers, investment custodians, and legal and professional service firms

Key reflections:
  • Alignment with clearly defines strategic intent
  • Understanding and navigating transaction complexity
  • Planning through integration


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Key themes:

Understanding transaction
impacts for members


~500 participants with active superannuation and/or account based pension funds

Key reflections:
  • Awareness and impact of members communication
  • Member cohort engagement
  • Merger impact on member satisfaction


Further insights

Further insights from superannuation funds

Potential mergers must meet members’ best interests: Assess the merits of a merger through the lens of the fund’s strategic and business plans and whether Members Best Interests objectives will be met

Ensure financial benefits are clear: Develop a merger business case framework that allows you early visibility regarding potential financial and strategic benefits arising from a merger transaction

Assess potential partners: Develop partner selection frameworks and assessment criteria to identify potential roadblocks as early as possible

Define governance structures: Implement clearly defined governance frameworks to support efficient and appropriate decision making

Assess internal fund capabilities: Review existing internal capabilities, key resources and identify potential capability gaps 

Further insights from service providers

Engage partners early: Engage partners early in the transaction to identify areas of complexity and to enable improved sequencing of support activities

Align stakeholders: Align all stakeholders on strategic imperatives

Effective transaction governance: To help create well defined decision-making frameworks and improve efficiency

Work with providers to identify complexity: Collaborate to identify areas of potential transactional complexity during due diligence

Implementation roadmap is key: Define upfront the implementation roadmap for the end state target operating model 

Further insights from fund members

Frequent communication required: Transaction awareness remains low, but is positively impacted by frequent communication

Member awareness linked to outlook: Transaction aware members are also typically the most positive towards merger activity

Improved member satisfaction: Merged funds likely to see small increases in member satisfaction

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