AN estimated 75 Western Australian businesses are being forced to change their superannuation manager after US finance giant Mellon decided to focus on its big clients.
The changes follow Mellon’s takeover and rebranding of NSP Buck, which had earlier absorbed Perth-based Allied Superannuation.
The changes at Mellon will leave the business with nine staff in Perth, down from a peak of about 100 in the late 1990s when Allied was a successful locally run business with 220 corporate clients.
The big winner from the changes is SMF Funds Management, which won a tender to take the master trust clients no longer wanted by Mellon.
Mellon marketing manager Craig Keith said 200 businesses currently used its superannuation master trust and 140 were being transferred to SMF.
It is understood WA accounts for more than half the total, reflecting the large number of Allied clients still with the group.
Mellon’s decision to cut its master trust clients follows an earlier move to transfer administration of the master trust interstate.
Mr Keith said the administration of stand-alone superannuation funds currently managed by Mellon would also be transferred interstate.
This would affect 13 large Western Australian businesses, including the Water Corporation and Foodland, which have super funds administered by Mellon.
Mr Keith said Mellon would retain client liaison and financial planning staff in Perth.
The changes will result in 12 job losses, including current State manager Adrienne Heal, whose position disappears under the restructure.
PricewaterhouseCoopers director, investment actuarial and superannuation consulting, Catherine Nance said the changes at Mellon highlighted one of the risks of using master trusts.
She said rationalisation of the master trust sector had already occurred and more was expected.
As a result, companies that carefully select a master trust to provide their superannuation services could
unexpectedly find themselves dealing with a new manager.
Ms Nance said companies had little capacity to opt out of a master trust they were unhappy with, unless they obtained the consent of their staff.
Mr Keith said Mellon was aiming to complete the transfer of its master trust clients by the start of 2004.
“We’ve already spoken to most of the affected employers,” he said.
“They are all quite okay with the change.”
The transfer would occur after Mellon and SMF finalised successor fund transfers, to ensure SMF offered equivalent rights and terms.
SMF is a privately owned business with $2 billion in funds under management and a further $700 million under administration.
