AvSuper, Commonwealth Super Corporation explore mergerBY JAMIE WILLIAMSON | WEDNESDAY, 4 MAY 2022 10:10AM
Read more: AvSuper, Commonwealth Superannuation Corporation, Michael Sykes
Six months on from commencing its Expressions of Interest (EOI) process, AvSuper has confirmed it will look to merge with Commonwealth Superannuation Corporation.
The two funds have signed a Memorandum of Understanding to now conduct due diligence to determine whether the merger is the right fit and in the best interests of members.
The merger requires government approval and passage of legislation, with the government having approved the signing of the MoU prior to the federal election being called, the funds said.
CSC is home to about 500,000 members and $60 billion in funds under management, while AvSuper has 6000 members and about $2.5 billion in assets.
AvSuper first launched its EOI process in December 2021, inviting select funds to participate. Of those funds, 75% responded and AvSuper chief executive Michael Sykes said the quality of the responses was high. Today, he said CSC is the right partner.
The funds said the merger is seen as "an opportunity to bring together two super funds who share a common heritage and provide superannuation to those who serve our country". AvSuper is a government but public offer fund with its foundations in the aviation industry while CSC is the super fund for Australia's government employees and defence forces.
CSC chief executive Damian Hill said: "AvSuper and CSC are a great fit and it is expected that a merger would benefit members of both organisations. We are both committed to 'serving those who serve'."
Having some shared service providers suggests a merger between the two may be streamlined, with both using Mercer as administrator and AIA as group insurer. AvSuper appointed AIA in March, switching from Hannover Life RE as it exited the market.
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