TelstraSuper merger with Aware creates big 5

A big five is rapidly evolving in the Australian superannuation market, with Aware Super ensuring it is part of that evolution via a merger with TelstraSuper.

If the merger proceeds as expected, the end result will be a superannuation entity boasting $228 billion in funds under management and with 1.3 million members.

To put this in context, Australia’s largest industry superannuation fund, AustralianSuper, boasts $365 billion and 3.5 million members, while the Australian Retirement Trust (ART) manages $330 billion for 2.4 million members, Hostplus manages $130 billion for 1.86 million members, HESTA manages REST manages around $99 billion for two million members and UniSuper manages $149 billion for 650,000 members.

Aware Super started off life as First State Super in NSW and comes with a strong track record and is viewing the merger with Telstra Super as improving its penetration into the corporate superannuation market.

Commenting on the merger prospects, TelstraSuper chair, Anne-Marie O’Loghlin described Aware Super as highly regarded and with the scale to help deliver improved retirement outcomes to members.

“It is expected the proposed merger will deliver lower fees, an expanded investment menu and a national servicing footprint to help TelstraSuper members further enhance their planning and transition to retirement,” she said.

Aware Super chair, Christine McLoughlin said TelstraSuper’s legacy of personalised service and member loyalty aligned with Aware Super’s focus.

“We also look forward to welcoming TelstraSuper’s strong corporate employer relationships and specialised capabilities that will significantly accelerate our corporate super offering,” she said.

The merger with Aware Super represents a substantial step up in scale than that which would have been delivered by Telstra Super’s proposed merger with Equip Super which was only aborted in mid-May.

While the Telstra Super board never specifically spelled it out, scale was always the issue with the Equip Super proposals.

The board of TelstraSuper said on 20 May that it had decided to terminate the heads of agreement that proposed to merge with EquipSuper because it had concluded it was not in the best interests of TelstraSuper members.

The statement said: “Bringing together two medium-sized funds is a complex process. As the merger process has progressed, and particularly in the period since the binding agreement was signed, it has become evident that TelstraSuper is unlikely to achieve our objectives for the merger, in the best financial interests of the Fund’s members”.