Asset and CareSuper funds confirm A$6.5bn merger
31 Aug 2012
Industry super funds Asset Super and CareSuper today announced they have formally agreed to merge on 26 October 2012. David Michaelis, Chairman of Asset, and Sandy Grant, Chairman of CareSuper, have confirmed they have signed a binding agreement to merge the two funds, stating they strongly believe the merger is in the best interests of all members.
In a joint statement, they said, "Both boards are satisfied this merger will deliver real member benefits over the long term, as the bigger fund will provide cost-efficiencies and greater purchasing power. Immediate benefits include improvements to insurance cover for all members, which will apply from the day after the merger."
On today's figures, the merged fund is expected to have over A$6.5 billion ($6.7bn) in funds under management and more than 267,000 members.
According to CareSuper CEO Julie Lander, there will be clear benefits for members of both funds: "The estimated cost savings from merging are more than 15% per year just on business-as-usual activities. Looking ahead, further savings will be achieved with only one fund, rather than two, undertaking the significant amount of work needed to meet the new Stronger Super requirements.'
The merger comes on the eve of Stronger Super reforms, which industry regulator APRA has flagged will have many fund trustees actively considering their scale.
John Paul, CEO of Asset Super, said the merger had been strategically planned and that it is a good cultural fit between the two funds. ‘Asset's "members first" focus sits well with the way CareSuper makes super easy for its members: "Through merging with a like-minded fund, we believe our members' retirement savings will continue to be in good hands,' he said.
The size and composition of the CareSuper Board will change as a result of the merger, with four of Asset's current Trustee Directors joining the Board. CareSuper will be the successor fund with Asset members merging into CareSuper. Julie Lander will continue as CEO of CareSuper after the merger. "The merged fund aims to combine CareSuper's record of strong investment performance with Asset's low fee structure," she said. "Above all, the merger is about generating the best net benefits for members to provide a better retirement outcome.
‘Bringing the two funds together has been made easier by the fact that we share the same administrator, Australian Administration Services (AAS), and the same custodian, National Custodian Services. "Asset and CareSuper members and employers can be confident they will be well looked after during the merger and transition process,' said Lander.
Author: Richard Newell