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VicSuper, FSS sign agreement, start due diligence
Posted on Tuesday, 23 July 2019 13:42
VicSuper and First State Super (FSS) have signed binding heads of agreement to create one of Australia’s largest superannuation and advice businesses, managing more than AUD 120.00 billion (USD 84.48 billion) in savings, second only to AustralianSuper.
The two pension funds, which started discussing the possibility of a merger earlier this year, will begin due diligence of each other’s operations and consider various business models.
In a joint release, they said the future board would initially start off with 14 directors, four of whom will be drawn from VicSuper's nominating bodies, and one independent chair, which will be reduced to ten by June 2020.
Established in 1992 to provide superannuation and retirement services to New South Wales, FSS has roughly AUD 91.00 billion in assets under management and offers members access to over 220 qualified financial planners across 150 locations.
The company has already gone through one merger - in 2011 it combined with Health Super - and in 2016 it bought financial planning company StatePlus.
On the other hand, VicSuper was founded in 1994 as a public sector fund for the state of Victoria that was administered by the Victorian Superannuation Board, which was subsequently replaced by two separate organisations in 1999.
Today, the pension fund has over 25,000 employees handling more than 250,000 member accounts and has about AUD 23.00 billion under management.
FSS and VicSuper announced in April that they had started merger discussions, though they cautioned at the time the talks were in the early stages and may come to nothing.
Investment Magazine noted talks between the two come as the prudential regulator is increasing pressure on trustees to make sure “funds are working in best interests of members”.
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