It’s time for super funds to rethink structure, skills, tech and operating model
Australia’s superannuation sector continues to rapidly consolidate, creating a landscape dominated by fewer, larger and more complex funds. This shift demands a fundamental transformation in workforce design.
As Australia's superannuation sector consolidates into fewer, larger funds, leaders must go beyond cost-cutting and reimagine governance, operating models, skills and culture, while responsibly harnessing AI and digital tools to convert scale into better outcomes for members. This article outlines the practical priorities for building flexible, resilient and member-centric super funds.
The consolidation of Australia’s superannuation sector has been underway for more than three decades but recent years have seen this trend accelerate. There are now fewer than 75 remaining APRA-regulated funds following large mergers, such as the formation of the Australian Retirement Trust and Mercer’s acquistion of BT Super.
This consolidation is underpinned by several key drivers:
- A focus on fees driven by APRA heatmaps, product level annual outcomes assessments and the Your Future, Your Super (YFYS) performance test.
- Intensifying financial and operational efficiency demands, pushing funds to achieve scale to remain viable.
- Increased governance requirements and regulatory pressures that are raising the bar for fund performance, management and board accountability. These include the introduction of the Financial Accountability Regime (FAR), uplifts to APRA prudential standards such as SPS 515 for member outcomes and CPS 230 for operational risk management, and the introduction of the Retirement Income Covenant.
- Shifting member expectations resulting in the desire for seamless digital experiences and personalised services, raising expectations for responsiveness.
- Fierce competition with funds given changes to distribution following the introduction of ‘stapling’ where a single super fund follows an employee as they change jobs.
- Technology platforms that need to respond to the rapid pace of technological change. Funds need to focus their often constrained capital, capacity and capabilities to invest effectively in new tools and platforms.
Together, these drivers make consolidation not just a strategic choice but a necessity for many funds aiming to thrive in the superannuation landscape.
The nature of consolidation is that while funds under management increase, there is still work to be done to realise the efficiencies and value of integrating merged funds. Oftentimes, HR teams may assume that integration can be achieved by applying methods that have worked in the past, however, the scale and complexity of efficiently running a combined fund coupled with an ever-changing technological landscape and evolving member experience, has rendered traditional operating models – designed for smaller, more siloed entities – suboptimal. This gap between past approaches and current realities presents a critical challenge for superannuation leaders seeking to realise the full benefits of consolidation.
Why workforce redesign matters now: addressing a shifting landscape
Traditional organisational operating models and structures may no longer suffice and must evolve to meet the demands of a consolidated and technologically advanced environment.
In practice, workforce design is evolving in four main ways:
- From hierarchy to agility: Organisations require flatter structures with distributed decision-making, as much as the law allows, to respond swiftly to changes.
- From jobs to skills: Work design should become more flexible, organised around tasks and skills rather than rigid job descriptions, to better align workforce capabilities with evolving business needs and stay adaptable.
- From duplication to integration: Shared services and centres of excellence bring together expertise and resources, combining efforts, removing duplication and improving efficiency.
- From old technology to digital enablement: Using digital tools, data analytics and automation in everyday work is essential to modernising work and improving outcomes for everyone, including members.
These shifts are not merely operational tweaks. They represent a fundamental rethinking of how super funds organise themselves to deliver value in a complex, fast-changing environment.
Why leaders must act now and how workforce design can help?
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Regulatory scrutiny is intensifying
Larger funds, as important financial insitutions, face increasingly complex governance obligations and closer oversight from APRA. After a merger, the coexistence of multiple systems and processes increases the likelihood of compliance breaches.
By reviewing how your organisation operates, ensuring you have the appropriate capabilities and streamlined governance, can help clarify how your organisation makes decisions, and bring risk and compliance functions closer together. This approach helps keep control and accountability strong, as the organisation grows and continues to evolve to meet regulator expectations.
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Economies of scale are expected, not optional
Trustees and members expect mergers to deliver lower costs and improve results. Without genuine efficiencies, consolidating can seem as if it’s growing for the sake of growth.
In bringing organisations together, and adopting technology and AI, it’s important to consider the best ways to streamline work (removing duplication), improve productivity, and combine expertise to save money and create more value for members.
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Members expect better service
Members increasingly demand seamless, digital-first experiences, personalised advice, and transparency. Fragmented service models and legacy systems undermine trust and satisfaction.
Reviewing the extent to which the operating model, capabilities and ways of working are grounded in member experiences, and underpinned by embedded digital capabilities and AI tools, can significantly help newly merged organisations work better together and deliver superior service on a larger scale.
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Talent and culture risks are mounting
As super funds consolidate into larger, more complex organisations, risks related to talent and culture become increasingly pronounced. Role ambiguity, culture clashes and integration fatigue can significantly erode employee morale and increase attrition, particularly in critical roles where continuity and expertise are essential. These challenges, if left unaddressed, threaten the organisation’s ability to deliver on good outcomes and run smoothly.
Organisations can address these challenges by implementing skills-based work design that clarifies roles, driving efficiencies, innovation and collaboration by enabling flexible use of talent and breaking down silos. Workforce design helps you decide whether to train, hire or partner externally to fill capability gaps. It also shows where AI can augment human effort, by automating routine tasks to free people for judgement, empathy and more complex problem-solving.
Culture integration also deserves careful attention. Beyond pay and incentives, successful cultural integration involves clear communication of shared values, leadership alignment, and creating forums for open dialogue to build trust and unity. Embedding a culture of continuous learning and adaptability helps reduce uncertainty and keeps employees engaged, fostering a unified workforce committed to the organisation’s goals.
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Technology is both a risk and an enablerTechnology can improve the member experience and make work more efficient across super funds. Digital tools, data analysis and automation can increase member retention, enhance service delivery, improve responsiveness and unlock new efficiencies that support growth and innovation. However, disconnected systems and data silos increase operational risk, and can hinder progress and innovation. Workforce design is key to successfully embedding technology and data governance into your organisation’s operating model, ensuring that digital tools are well integrated with clear ownership and accountability. By designing structures and processes that treat technology as a core part of your organisation, you can work more efficiently, strengthen compliance, and better manage technology risks.
Break away from the past and focus on the future
Australia’s superannuation sector is going through a fundamental shift that will continue to reshape the industry. But simply upscaling through mergers and acquisitions is not enough to secure success. The old ways of organisational redesign, defined by small changes to existing structures, making only surface-level changes, or reliance on traditional top-down models, will no longer deliver the results that today’s large funds need.
The future of superannuation belongs to those willing to break from the past and lead with clear intent – building organisations that are adaptable, use technology well and put members first. Only then will consolidation bring meaningful, lasting benefits to your business.
Questions to consider
As you navigate change, think about these key questions:
- Is your operating model flexible and agile, but still strong on governance and risk management?
- How are you filling skill gaps through skills-based work design and strategic talent acquisition?
- What are you doing to align culture and maintain employee engagement?
- Are your governance and decision-making structures clearly defined to support both fast action and control as you grow?
- Have you identified areas where technology and AI can improve productivity and member experience?
If these questions resonate with your organisation’s challenges, we encourage you to connect with our team of experts. We are ready to partner with you to navigate the complexities of workforce design and consolidation.
Further reading:
Embedding continuous learning fosters adaptability and unites the workforce around shared goals.
Principal, Organisation and Workforce Transformation, Mercer
Author
Disclaimer
This article has been prepared by Mercer Consulting (Australia) Pty Ltd ABN 55 153 168 140 (MCAPL). MCAPL is a wholly-owned subsidiary of Mercer (Australia) Pty Ltd ABN 32 005 315 917 (‘Mercer Australia’). References to ‘Mercer’ shall be construed to include Mercer Australia and/or its associated companies. This article is intended to inform clients of Mercer’s views on particular issues. It should not be relied upon or used as a substitute for professional advice specific to a client’s individual circumstances. Whilst Mercer believes the prospective information and forward looking statements made by Mercer in this report are based on reasonable grounds, they are predictive in character and may therefore be affected by inaccurate assumptions or by known or unknown risks and uncertainties.
‘MERCER’ is an Australian-registered trade mark of Mercer (Australia) Pty Ltd ABN 32 005 315 917.
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