TelstraSuper and Equip Super have signed a binding Heads of Agreement to proceed with the merger between the two funds.
Earlier this year, the two funds signed a non-binding Memorandum of Understanding and started a due diligence process to explore the benefits of a merger, but they now confirm that a merger is expected to be in the best financial interests of members of each fund.
“It is expected that the merger will achieve significant scale benefits and deliver improved retirement outcomes to the members of each fund, whilst maintaining the personalised service that each fund currently delivers,” the funds said in a statement.
Members will receive a reduction in the asset-based administration fee to 0.15 per cent and a reduction in the administration fee cap to $750 per annum from the effective date of the merger of the two funds.
The merger will create a combined profit-to-member fund with more than $60 billion in funds under management and over 225,000 members. The merged entity will continue under the name of Equip Super.
The merged entity’s board will comprise an equal number of legacy TelstraSuper and Equip Super directors. The equal representation model will be maintained with 2 independent directors, 4 employer-representative directors and 4 member-representative directors.
Michael Cameron, Chair of Equip Super, will become the Chair of the new fund’s board, while Anne-Marie O’Loghlin, Chair of TelstraSuper, will be Deputy Chair.
“It is a privilege to be named the inaugural Chair, as Equip Super and TelstraSuper come together to form a new fund that will deliver scale benefits to our members, including an immediate fee reduction at the time of the merger,” Cameron said.
Chris Davies, Chief Executive Officer (CEO) at TelstraSuper will become the inaugural CEO of the new fund. Scott Cameron, CEO of Equip Super, will become the Deputy CEO, focusing on merger integration.
But once the operational integration of the two funds is complete to the satisfaction of the merged entity’s board, the parties intend that Scott Cameron will succeed Chris Davies as the permanent CEO of the new fund.
The two funds will continue to operate independently until the merger is executed via a successor fund transfer, which is expected to occur in late 2025. It is anticipated that operational integration will be substantially complete around the end of 2026.
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