AUSTRALIA- Two South Australian superannuation funds, the A$1.7bn Local Super and A$2.4bn StatewideSuper, are having "detailed" discussions about merging, the funds have confirmed.
Juliet Brown, chairman of Local Super, and Nicholas Begakis, chairman of StatewideSuper, said preliminary reviews by both boards indicate that a merger may be in the best interests of their respective members, but that appropriate due diligence would need to be completed and shareholder approval received before a merger could take place.
The proposal is the latest in a growing trend for super fund mergers. Brown and Begakis pointed to the Government's Cooper Review into the governance, efficiency, structure and operation of Australia's superannuation system as enough encouragement to consider merger and acquisition opportunities. Many funds are looking at their options now before large parts of Cooper's recommendations become law next July.
Local Super was established in 1984 to meet the superannuation needs of local government employees in SA and the Northern Territories, and also manages the superannuation benefits for those with a historical link to local government. StatewideSuper is the profit-for-members industry super fund for South Australians. A merged entity would result in the fund becoming the pre-eminent industry fund in South Australia with funds in excess of A$4bn.
The announcement comes a week after a proposed merger between two other super funds, Equipsuper and Vision Super, was postponed on the eve of the agreed date following governance objections from board members. (Global Pensions: 27 May 2011)
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