AUSTRALIA - The superannuation fund City Super has awarded a A$1.5bn ($1.5bn) custodian and administration mandate to JP Morgan Treasury and Securities Services (TSS).
The mandate win comes after City Super announced it will merge with Local Government Super (LG Super), an existing client of JP Morgan, on 30 June 2011, and will therefore require an investment administration provider. JP Morgan will also offer transition management services as the two funds combine.
The move will strengthen JP Morgan's position in the investment and administration sector said Bryan Gray, JP Morgan head of treasury and securities services sales and client management.
"Although custody and administration is increasingly becoming a scale driven business, clients are continually seeking tailored solutions. As a provider, we are constantly looking for ways to meet these needs and believe this was a determining factor in winning the mandate.
"We are currently in discussions with LG Super and City Super to find ways to optimise the custody and administration offering. We are committed to ensuring our services are the best possible fit for the new fund including providing tax propagation, currency overlay and securities lending services," he said.
The City Super and LG Super merger follows the current trend of mergers and acquisitions within superannuation aimed to help long term returns. Previously, Australia's largest pension fund AustralianSuper merged with Westscheme to form a A$40bn ($40.2bn) fund. Prior to this, First State Super and Health Super combined to create one A$28bn scheme and Cbus Super and CONNECT Super merged to create a A$15bn fund. (Global Pensions: 10 February 2011)
This week's top stories included Legal & General acquiring MyFutureNow to provide a dashboard service to customers, while also agreeing a hybrid buy-in with a Hitachi scheme.
NEST has signed up to the government-backed Star Initiative, taking all of its 8 million members' pension pots with it.
It is perhaps inherently difficult to find an agreed definition of value for money, but some methodologies could act as a stopgap, argues Jonathan Stapleton.