The chief of the Super System Review, Mr Jeremy Cooper has made a determination that over competitiveness in the industry is leading to a failure to capture economies of scale which could be used to benefit fund members and managers.  The enormous power which the $2 trillion dollar industry now yields in investment markets means that these funds should be able to gain much better results for their members than they currently obtain.  The review system is now of the view that funds should adopt a much more aggressive and direct investment strategy in order to maximize returns by directly owning assets and reducing the fees of intermediaries.  The vision of the regulator is that there would one day be only a small number of funds in operation in Australia.  This vision consists of only 27 large Australian Prudential Regulation Authority-regulated funds, three with assets of about $200bn, four with $100bn and the rest with an average size of $50bn each.  The proposal emphasizes the need for super funds to refocus on funds staking rights for substantial amounts of capital.   The examples which the regulator gave of the Australian Superannuation industry missing out on substantial returns as a result of the failure to conglomerate was the where some of the largest Canadian pension funds made a bid for the Transurban group.

Critics of the proposal point out that without substantial incentives for funds to aggregate, it is unlikely that this proposal will be realistic.  Also the monopolistic power of the funds would be a concern in terms of the macroeconomic structure of the market for superannuation in Australia.   The choice available to consumers would be more limited and less personalized.   The commentators who seemed neutral about the proposal reacted by saying that the message from the talk was that the system of superannuation was ultimately built for members and that it has been hijacked by sales people and investment managers and the government intends to restore control to members and the fundamental benefits of the system to members.