WOODSIDE Petroleum has joined the trend toward outsourcing of superannuation.
Its staff super fund, which has assets of $340 million and 2,300 members, will be outsourced to the Mercer Super Trust from December 1 this year.
Fund secretary Ian Thewlis said Mercer was chosen ahead of three other short-listed master trust providers – AMP, Towers Perrin and National Australia Bank subsidiary Plum Financial Services.
Woodside initially looked at 16 options with assistance from PricewaterhouseCoopers.
Mr Thewlis said an important consideration was Mercer’s experience in running defined benefit schemes.
Woodside’s defined benefits scheme was closed in 1999 but still has about 500 members and will continue to be managed by Mercer.
Mr Thewlis said several industry funds were included in the 16 invited to tender, but their lack of experience with defined benefit schemes counted against them.
The outsourcing of the super fund follows a major cost-cutting program at Woodside, leading to substantial staff cuts.
Mr Thewlis said the decision to outsource the fund was based on a number of factors, particularly the increasingly onerous regulatory requirements surrounding superannuation.
Many companies around Australia have already chosen to outsource super and Mr Thewlis predicts the trend will continue as trustees become more aware of tough new licencing rules.
He said Mercer, which had been the fund actuary for several years, would offer enhanced benefits to fund members, including a broader range of investment options.
Mercer’s intranet site was another strong selling point.
“It’s very informative and easy to navigate around,” Mr Thewlis said.
Fund members wanting to check account information or switch their investment options would use the intranet.
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