Australian superannuation funds CareSuper and Spirit Super are exploring a merger to create a A$45 billion (US$28.96 billion) fund with “a distinct point of difference”.
They are the latest to join the merger fray as the coronavirus crisis hurt the profitability of super funds over the last two years, forcing many to combine to cut costs.
Spirit Super, a fund with A$25 billion of assets, is itself the product of a merger in 2021 between Tasplan and MTAA Super. Its members are workers in the motor trade industry and workers in the state of Tasmania.
CareSuper is a A$20 billion fund for professional, managerial, administrative and service occupations in all business sectors.
“Both funds have identified a shared common vision to potentially create a mid-sized fund that provides a distinct point of difference in the market,” they say in a joint statement on November 9 after signing a memorandum of understanding for a possible merger. A combined fund will have more than 500,00 members.
The funds will first conduct “extensive” due diligence that will take several months to ensure that a merger is in the best financial interests for members, Spirit Super Chair Naomi Edwards and CareSuper Chair Linda Scott say in the statement.
Both funds will operate independently during this time with no disruption to their operations.
Figures from the Association of Superannuation Funds of Australia show that the superannuation industry had around A$3.3 trillion of total assets as of June 2022, slightly down from A$3.28 trillion a year ago.