New super merger on the cards in 2021

By Grace Ormsby

July 13 2020
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A $6 billion super fund and a $54 billion fund have signed a memorandum of understanding and will commence due diligence on a joint arrangement.

A partnership between Media Super and Cbus Super would see a merging of the funds’ investment and administration operations.

Media Super looks after almost $6 billion of retirement savings for workers within the printing, arts, media and entertainment industries predominantly.

Cbus Super – a $54 billion fund – primarily caters to building, construction and allied sector employees.

According to the announcement from the funds, the joint arrangement will potentially manage the retirement savings of more than 800,000 Australians, and could be in operation as early as next year.

According to Media Super chair Gerard Noonan, the joint arrangement will enable Media Super members to access the benefits of scale.

“By increasing our size, we can provide access to a greater range of investment opportunities and provide a better deal through cost savings, potentially reducing the investment fees,” Mr Noonan said.

“We believe that the merger will also continue to build on our leading responsible investment approach and have a much stronger voice with the companies with which we engage,” he added.

It comes after the assistant minister for superannuation, financial services and financial technology last year said, “Mergers provide a more sure-footed route to economies of scale than other activities, which may not have such a clear or readily measurable link to that outcome.”

Senator Jane Hume had said mergers “would make our super system more efficient and could significantly benefit members”.

For Cbus Super chair Steve Bracks, any joint arrangement will require a maintenance of the super fund’s strong connection with members.

“This affinity with our members has built a strong level of trust in the fund. Media Super has a very similar history and connection with their members,” he said.

“This is an exciting opportunity for both of our funds and I am very pleased to see this proposal progressing.”

According to the statement from the funds, the partnership is conditional on a more detailed due diligence process taking place, which will provide an independent assessment proving confirmation that the joint arrangement is in the best interests of members for both parties.

About the author

Grace Ormsby

Grace is a journalist on Momentum Media's nestegg. She enjoys being able to provide easy to digest information and practical tips for Australians with regard to their wealth, as well as having a platform on which to engage leading experts and commentators and leverage their insight.

About the author

Grace Ormsby

Grace is a journalist on Momentum Media's nestegg. She enjoys being able to provide easy to digest information and practical tips for Australians with regard to their wealth, as well as having a platform on which to engage leading experts and commentators and leverage their insight.

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Retirement