2023 recap: Super industry’s year of mergers and transformations

Faced with the imperative to comply with new regulations like the Your Future, Your Super (YFYS) reforms and driven to identify suitable merger partners in the best interests of their members, the industry has witnessed a sustained pace of mergers.

AustralianSuper and Australian Retirement Trust (ART) have each set a goal to reach $500 billion in assets under management by the end of the decade, in a landscape where Australia’s $3.5 trillion superannuation industry could be dominated by a small number of so-called “mega funds”.

Below we bring you some of the major moves made by funds in 2023.

January

The year kicked off with UniSuper expanding its size by 80,000 members after merging with Australian Catholic Superannuation (ACS). It brought $10 billion in funds to UniSuper, which had over $105 billion in assets.

February

In February, AvSuper called off its merger with Commonwealth Superannuation Corporation and instead said it was pursuing a merger with the Australian Retirement Trust (ART).

ART was formed from the merger of Sunsuper with QSuper, which was finalised in February last year, and ranks as one of Australia’s largest super funds.

March

ART then announced it had entered into a memorandum of understanding with Alcoa Super over a potential merger.

At the time, ART chief executive officer Bernard Reilly said that ART was well on its way to achieving its target of $500 billion in FUM by 2030 and continuing to grow its national footprint for the benefit of its members.

April

In April, Mercer Super announced the completed merger of BT Super into the Mercer Super Trust.

At the time, Mercer said it is now one of the 15 largest funds in Australia with approximately 850,000 members and $63 billion total assets under management.

Commenting on the merger, Marsh McLennan Pacific chief executive officer and Mercer Pacific president, David Bryant, said that it would transform the superannuation industry to the advantage of Australians.

May

In May, Cbus Super chair Wayne Swan announced that the industry super fund had successfully completed its merger with EISS Super.

“Today, we welcome 17,000 new members into Cbus who are largely working in the energy and electrical sector across metro and regional NSW,” said Mr Swan.

Cbus now manages over $80 billion in retirement savings on behalf of 900,000 members, including over 50,000 members in the electrical sector.

Also in May, Mercer said it planned to welcome members of Holden’s employee super fund in June. As of its annual report in 2022, Holden Employees Superannuation Fund had 1,753 members and $313.5 million in total assets.

June

CareSuper and Spirit Super announced in June that they have entered into a binding agreement to merge the two superannuation funds.

The merger, which is expected to be completed in late 2024, will create a combined fund with more than 500,000 members and almost $50 billion in funds under management.

Also in June, Active Super and Vision Super announced they intend to merge to create a new, larger entity with around $27 billion in funds under management, 170,000 member accounts, and a broader geographic presence across NSW and Victoria.

July

While merger activity was quiet in July, UniSuper did announce its acquisition of a 50 per cent stake in an industrial property portfolio made up of prime assets in Sydney and Melbourne in a $560 million deal.

The $120 billion super fund acquired the stake from the National Pension Service of Korea, joining the $1.1 billion industrial portfolio’s existing investors Dexus and Blackstone.

August

In August, AvSuper and ART formally entered into a heads of agreement. The merger is expected to be completed on 30 April 2024.

“There’s still a lot of work to be done before the merger takes place,” AvSuper said at the time.

“Our working groups are continuing to plan and commence activity for this transition behind the scenes, including organising the transfer of the defined benefits accounts to ART.”

A week earlier, ART confirmed it had successfully completed a successor fund transfer (SFT) with Woolworths Group and Endeavour Group.

As a result, ART’s total funds under administration rose above $260 billion with a total membership of more than 2.3 million.

September

A new collective body emerged from the merger of the Australian Institute of Superannuation Trustees (AIST) and Industry Super Australia (ISA) in September, named the Super Members Council of Australia.

The foundation funds are eight of Australia’s largest – Australian Retirement Trust, AustralianSuper, Aware Super, Cbus Super, HESTA, Hostplus, Rest Super, and UniSuper – a statement at the time confirmed.

“The Super Members Council will advocate for the interests of the more than 10 million Australians who belong to a profit-to-member super fund – to ensure superannuation policy is stable, effective, and equitable,” said interim chair Nicola Roxon at the time.

Also in September, Hostplus and Maritime Super announced that a merger between the two industry super funds has now successfully been completed.

Approximately 23,000 Maritime Super member accounts representing more than $6 billion in funds under management (FUM) have transitioned to Hostplus as part of the merger. Subsequently, Hostplus’ FUM now exceeds $100 billion with a membership of 1.7 million.

Also in September, Qantas Super announced it is seeking a potential merger partner amid a rapid decline in the number of corporate super funds in Australia.

October

In late September, Betashares announced it has reached an agreement to acquire Bendigo and Adelaide Bank’s superannuation business and enter the Australian super industry.

In October, Betashares chief executive officer Alex Vynokur explained that the ETF provider’s expansion into the superannuation industry will provide some “much needed competition” to a sector heavily weighted towards consolidation.

The deal is expected to be completed in 2024.

November

ART added 63,700 new members and $12.3 billion in funds under management as part of its largest corporate transition to date in November.

ART announced that it had successfully merged with the $12.3 billion Commonwealth Bank Group Super last month.

At the time, ART chief commercial officer Dave Woodall said the merger signalled the strength of ART’s offering for corporate clients and its skill in managing complex transitions.

December

In the last month of the year, Mine Super and TWUSUPER announced that next year they will merge under the new name “Team Super”.

If undertaken, the merged entity would create a combined fund managing nearly $20 billion on behalf of over 150,000 members.

Maja Garaca Djurdjevic

Maja's career in journalism spans well over a decade across finance, business and politics. Now an experienced editor and reporter across all elements of the financial services sector, prior to joining Momentum Media, Maja reported for several established news outlets in Southeast Europe, scrutinising key processes in post-conflict societies.