By Nick Hedley
Melbourne-based Mercer Super Trust, which has about
A$30 billion (US$20.6 billion) under management and is part of the New
York-listed Marsh McLennan group, has agreed to absorb Lutheran Super, a
fund with A$680 million (US$467 million) in assets.
Tighter regulations have pushed up administrative costs and sparked
a wave of consolidation in Australia’s superannuation industry as smaller funds
seek greater scale.
At the fund’s annual members’ meeting on August 22, Lutheran
Super chair John Grocke said the board had decided that a merger with a
larger fund was in the best interests of clients. Regulators supported the
move.
Mercer Super already provides administration, investment
management, consulting and actuarial services to Lutheran Super, and was found
to be the best fit, Grocke said.
“It’s taken longer than planned to reach this point, but
we’re certain all parties are aligned,” he added. The funds will work towards a
“transition date” of October 25.
Mercer Super recently announced a merger with Westpac’s BT
Super, which has around A$35 billion (US$24 billion) in assets. After
that transaction concludes early next year, the fund will have 880,000 members
and A$65 billion (US$45 billion) under management, Tim Barber, the head of
Mercer Super, said in the Lutheran Super meeting.
The members of both BT Super and Lutheran Super will gain
access to a global organization with “significant scale” and access to a wider
range of investment opportunities. The mergers will also help to reduce fees, Barber
said.
Once both transactions are complete, Mercer Super will be a
“top 10 to top 12” superfund and will have one of the most competitive fee
structures in the industry thanks to its global reach, Barber said.