Governance deadlock at BUSSQ ends as merger plans put on ice

Michael Read and David Marin-Guzman

Feb 23, 2022 – 6.26pm

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The governance deadlock at Queensland-based construction industry superannuation fund BUSSQ has ended after the board’s shareholders agreed to put merger discussions with Cbus on ice.

The CFMEU and Master Builders Queensland agreed the interests of BUSSQ “are best served by maintaining the existing management and board structure”. Bloomberg

Master Builders Queensland’s nominated directors – Paul Bidwell, Sonya Beyers and Madeline Dermatossian – all resigned last month from the BUSSQ board in the face of a deadlock with CFMEU-nominated directors over merging with Cbus.

The resignations left the board without a quorum and unable to function. There were concerns over a run on the fund.

But Master Builders Queensland announced on Thursday afternoon that it had appointed three new directors – Paul Hick, Christopher Taylor and Geoff Baguley – to the board of the $6 billion industry fund, effectively ending the deadlock.

The cause of the dispute between the union and the employer group was a proposed merger with the $70 billion construction industry fund Cbus.

CFMEU Queensland secretary Michael Ravbar, who took a seat on the board in November, is strongly opposed to BUSSQ merging with the $70 billion fund and last year said Cbus had “lost its way” and members should dump it.

The Australian Prudential Regulation Authority (APRA) has been pressuring small super funds, including BUSSQ, to merge.

Sources said APRA previously wrote to the BUSSQ board about its merger plan, which was expected to have started in-principle by the end of last year, and about the chair’s role in facilitating the plans for the fund.

It is understood that Master Builders Queensland and the CFMEU agreed that merging with Cbus was not a priority, but the fund remains open to merger discussions in future.

CFMEU assistant secretary Jade Ingham said the union and Master Builders Queensland had agreed the interests of BUSSQ “are best served by maintaining the existing management and board structure”.

Despite the agreement, the fund will still face intense pressure from APRA to merge with a larger fund.

Cbus is seen as the most viable option because it is the only other fund with a legal exemption to charge insurance for members with less than $6000 in their accounts due to safety concerns about young construction workers.

Master Builders President Ralf Dutton said the “new look” board would focus on delivering the best outcome for the fund’s members.

Michael Read is the Financial Review's economics correspondent, reporting from the federal press gallery at Parliament House. He was previously an economist at the Reserve Bank of Australia and at UBS. Connect with Michael on Twitter. Email Michael at michael.read@afr.com

David Marin-Guzman writes about industrial relations, workplace, policy and leadership from Sydney. Connect with David on Twitter. Email David at david.marin-guzman@afr.com