AvSuper and the Commonwealth Superannuation Corporation (CSC) have entered a Memorandum of Understanding (MoU) to conduct due diligence to determine whether a merger is in members’ best interests.
The merger would require Government approval, along with the passage of appropriate legislation through Parliament.
Prior to the election being called, the Government agreed to CSC entering into this non-binding MoU with AvSuper to explore this merger.
CSC had a 100-year history of providing superannuation services to current and former Australian Government employees and Australian Defence Force employees and veterans. AvSuper was formed in 1990 and was dedicated to the aviation and aviation safety industries.
AvSuper chief executive, Michael Sykes said: “After a comprehensive and highly competitive Expression of Interest process, we see CSC as the right partner to manage our members’ superannuation into the future”.
The fund first announced it was seeking a merger partner last December as it said the costs of running a smaller fund were becoming harder to sustain.
Both funds said the best interests of members would be the deciding factor in the MoU talks, with CSC CEO, Damian Hill, saying: “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’.”
“For members, this merger will mean that the best features of both organisations were consolidated. AvSuper’s members will benefit from CSC’s $60 billion scale in investments and CSC members will see a larger, more diversified customer base.”
Both organisations currently partnered with Mercer Administration Services for provision of customer service and administration services, and with AIA Australia for customer insurance.
The organisations confirmed there would be no impacts to employees as due diligence and preparation for government approval was underway.