The two industry funds have completed a merger that has been years in the making and now have a combined $120 billion in funds under management.
The merger has created one of Australia’s largest industry funds, with 1.1 million members from the healthcare sector, police and emergency services, and government and community workers.
“This merger truly puts our members first, delivering significant benefits to members of both funds and building on our shared heritage, values and strengths,” said First State Super CEO Deanne Stewart. “Both funds are [top-performing] funds and believe deeply in the importance of investing in a responsible and sustainable way.
“Together we will leverage our combined scale to invest in ways that strengthen our community and the economy while continuing to deliver strong, sustainable long-term returns for members.”
The merger has been on the cards since August 2019, and will create significant economies of scale that will allow reduced administration and investment costs – savings Ms Stewart says will be passed on to members. The merger has allowed for a 20 per cent reduction in fees for VicSuper accumulation members within the first year.
“While VicSuper has been a high-performing fund, our board knew that accessing scale through a merger would be key to driving value for our members into the future,” said VicSuper’s former CEO Michael Dundon. “Today’s merger marks the achievement of our strategy to align with a fund that shares our values and member-first culture.
“Last year our boards set the goal to finalise the merger by 1 July 2020; and despite the challenges posed by COVID-19 over the past six months we are pleased to say that we have brought our two funds together as planned.”
Mr Dundon will join First State Super as part of the executive team, and will be responsible for overseeing the integration of VicSuper and other future merger opportunities. Gabrielle Bell, Patricia Faulkner, Antoinette Masiero, and Travis Bates will all join the board of First State from VicSuper, while Sue Carter and Rod Harty will step down from the First State board.
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