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Lutheran Super prepares for merger

Lutheran Super informed members it has found its preferred merger partner, following a decision last September to assess the fund's options.

In December the corporate fund, which holds less than $1 billion in funds under management, told members that a shortlist of "three great options were evaluated by the trustee with members best interest for the future being the driving factor" and that a preferred partner has been identified.

"A preferred fund has been selected and the trustee is working through a robust process to assess this option and discussions are progressing well," Lutheran Super said.

The fund said it expects to make an official announcement in February or March.

This follows a decision by the fund's trustee in September 2021 to investigate potential merger partners "to ensure the continued success of the fund", citing pressure on smaller funds as a result of continued regulatory activity.

According to Rainmaker data, the Adelaide-based fund has about $700 million in funds under management and just over 6000 members; about 70% of its members are female.

To 30 November 2021, the fund's MySuper option achieved a one-year return of 12.9%. Over three years it's achieved 10.3% and 8.8% over five years. All of Lutheran Super's investments are managed by Mercer, which also serves as administrator.

The confirmation of its merger plans coincided with Lutheran Super closing its defined benefit division.

The DB offering was wound up on December 31, with all DB members moved into the fund's accumulation division. According to APRA data, in 2020 the DB division only accounted for 2% of the fund.

Read more: Lutheran SuperMySuperRainmaker