Commonwealth Bank Group Super (Group Super) has issued an update for its members, noting that its planned merger with Australia Retirement Trust (ART) should be finalised in the coming weeks.
According to Group Super, members can expect to have their super/pension entitlements transferred to Australian Retirement Trust as soon as 4 November 2023.
The merger will occur via a successor fund transfer (SFT), whereby existing Group Super defined benefit and defined contribution members automatically transfer to ART, the fund explained.
The SFT is conditional on certain factors being met such as the trustee being satisfied that the merger is in members’ best financial interests and equivalency of rights for members in ART.
In the member update, the fund also assured that CBA supports the trustee’s decision to pursue a merger with ART.
“Similarly to the trustee, CBA as sponsor of Group Super, considered the evolution of superannuation, the increased expectations and need for scale,” it said.
“CBA and the trustee both concluded, given the increasing need for scale over time and the long-term fee challenges required to ensure the fund remains competitive, that alternatives to continuing a corporate superannuation fund be considered. Australian Retirement Trust would also become CBA’s default super fund for new employees from the time of the merger.”
Moreover, the fund explained that despite passing the MySuper annual performance assessment, the “trustee believes that it is in the best financial interests for members over the longer term to transition to a larger superannuation fund”.
“With more than $240 billion under management, Australian Retirement Trust is one of Australia’s largest super funds. CBA is of the view that a potential merger with Australian Retirement Trust is an appropriate next step for employees and members and supports the trustee’s decision to pursue a merger.”
Group Super first noted its intention to merge with ART in February this year. A few months later, in June, the pair signed a non-binding heads of agreement.
At the time, it was confirmed that Group Super had 67,000 members and $12.3 billion in funds under management.
Meanwhile, one of the few corporate funds that has yet to merge, Qantas Super, announced last week that it is seeking a potential merger partner amid a rapid decline in the number of corporate super funds in Australia.
In a short statement, Qantas Super said its readiness to explore a merger has been prompted by a recent review of its scale and future prospects.
“After carefully reviewing Qantas Super’s scale, the fund’s growth path, and the legislative and regulatory environment, the trustee believes it is prudent to explore merger options for the future,” the fund said.
However, Qantas Super also cited recent consolidations as having an influence on its decision. Namely, the last two decades has seen the superannuation industry rapidly consolidate and the number of corporate super funds having declined rapidly – from 761 in 2004 to just 11 in 2022.