The size of Australia's largest superannuation funds has meant they are starting to behave like financial services firms, according to JP Morgan's Benjie Fraser.
Fraser, who is global pensions executive for JP Morgan Worldwide Securities Services, said the Australian superannuation industry has witnessed a second wave of consolidation, "particularly with the prudential requirement to consider whether they have the scale".
"What we are experiencing in Australia at the moment is a real push by the regulators to force the superannuation industry to be benchmarked and monitored the same way the banking and insurance sectors are – the key reason being the sheer size of the superannuation industry," Fraser said.
The Australian system is also an example of best practice around the world, with many markets looking to emulate it. Fraser pointed to the recently formed National Employment Savings Trust (NEST) in the UK as an example of Australia's influence.
NEST was formed to address the highly fragmented state of the defined contribution market in the UK, and will have around 11 million people enrolled in it by the beginning of 2013, according to Fraser.
The trust is aimed at highly mobile people who may have as many as six 'pots' of defined contribution savings, he added.
"The answer is to try and create super trusts which would allow these assets to be put together in industry-wide multi-employer groups, and [the Government] is looking at Australia as the example of the way to do it," Fraser said.
Fraser's hope is that there will eventually be a "world of NESTlings" that will foster the creation of superannuation trust market places around the globe.
NEST has an auto-enrolment element, which is similar to the auto-consolidation elements of the Australian Stronger Super legislation, Fraser said.
