Farewell TelstraSuper: Largest corporate fund explores merger options

TelstraSuper is searching for a merger partner, after its board concluded that size and scale are "increasingly important" to serving members' best financial interests.

"The TelstraSuper Board see this as an exciting opportunity for members as we seek to transition to become a larger entity with an enhanced range of benefits and services offered to members. A merger has the potential to deliver further fee reductions for members into the future," a statement from TelstraSuper said.

The $26 billion super fund was initially created in 1990 exclusively for Telstra employees 30 years ago, but it now has a much broader membership, having allowed family and friends of employees to join in recent years. Currently, less than one quarter of the fund's 84,000 members work for Telstra.

For this reason, the TelstraSuper board and Telstra concluded that the fund should have a new, "separate identity" from the Telstra Group.

"A merger will facilitate the rebranding of the fund," TelstraSuper said.

TelstraSuper also said that it needs to move to a new custodial arrangement as its current contract with J.P. Morgan is set to expire in 2025, which is a "significant task" for the fund.

"... again, a merger will facilitate the timely replacement of our current custodial arrangements," the fund said.

TelstraSuper said it "will not rush," but if a suitable merger partner is found, a decision will probably be made this year, with a potential merger occurring in late 2025.

It said it is "currently in a strong and healthy position," citing positive net member growth, high member advocacy, and a growing retiree cohort.