Get 40% Off
⚠ Earnings Alert! Which stocks are poised to surge?
See the stocks on our ProPicks radar. These strategies gained 19.7% year-to-date.
Unlock full list

Merger creates Australia's second-largest pension fund

Published 23/07/2019, 12:54 pm
Updated 23/07/2019, 01:00 pm
© Reuters.  Merger creates Australia's second-largest pension fund

By Paulina Duran

SYDNEY, July 23 (Reuters) - First State Super and VicSuper said on Tuesday they have signed a binding deal to merge, creating Australia's second-largest pension fund as regulatory pressure drives consolidation.

The new superannuation, or retirement, fund would have about A$120 billion ($84.3 billion) in assets under management servicing over 1.1 million workers, the nonprofit funds said in a joint statement.

AustralianSuper is the largest, managing about A$160 billion. merger was "broadly seen as a progressive and proactive step for the two funds, and one that's very much aligned with the growing trend of consolidation across the superannuation industry," the funds said in a statement.

The funds had disclosed they were in merger talks earlier this year. public inquiry last year found that large fees charged by some fund managers within Australia's compulsory A$2.7 trillion pension system were eroding workers' savings, and that many were not putting customers' interests ahead of their own.

In the aftermath of the inquiry, the regulator has promised to step up scrutiny and push serious underperformers out of the industry.

Wayne Byres, chairman of the Australian Prudential (LON:PRU) Regulation Authority (APRA), said last week the "persistent push" to lift prudential standards had contributed to consolidation.

"I'm quite confident that we'll see potentially a lot more exits from the sector over the next little while," he added.

First Super and VicSuper said the signed heads of agreement would follow a period of due diligence, and expected to complete the merger with one single board of directors by June 30, 2020.

($1 = 1.4231 Australian dollars)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.