The planned merger of two of Australia’s smaller superannuation funds, MTAA Super and Tasplan, has been put off for six months until March next year, due to the COVID-19 global crisis.
The merger to create a A$23bn (€12.5bn) fund – the first in the current cycle of industry consolidation – was originally set to be completed in October.
MTAA and Tasplan said yesterday that the decision to defer came after a joint recommendation from MTAA Super CEO Leeanne Turner and Tasplan CEO Wayne Davy to the chairs of both boards, to extend the implementation of the merger because of sustained market volatility and concerns about supply of specialist services.
Despite the new timeline, Turner said the decision behind the merger and the benefits to members of both funds remained unchanged.
“We still believe the merger is in the best interest of members of both funds. A combined fund will provide greater efficiencies, improved products and services, increased capability, and better value to members,” she said.
“So, we remain fully committed to the merger — just with an extended time.”
Turner also acknowledged that recent restrictions as a result of COVID-19 had put extra strain on people.
“Clearly things have changed rapidly for all Australians in the last few weeks. We recognise the pressure that this is putting on our members and our staff, both at work and at home,” she said.
“We think extending the merger timeline will ease stress and help our staff better manage workloads and their personal arrangements.”
Member support is a key priority for both funds, with members expressing concern about market volatility and financial hardship.
“Understandably, members are concerned about their retirement savings. And we’ll likely see an increase in the number of people facing financial difficulties in the coming weeks and months,” Wayne Davy said.
“By extending our merger timeline, we can focus on getting members the service, advice, and support they need right now. That’s always been a priority for us, but now it’s more important than ever.”
MTAA Super and Tasplan finalised their unconditional merger agreement last November. Together, they have some 335,000 members.
MTAA handles more than A$13bn in retirement savings for workers in the motor trades and allied industry. Tasplan is a multi-industry not-for-profit fund managing A$10bn in assets.