First State Super and WA Super are exploring the benefits of a merger and have signed a memorandum of understanding.
The funds will undertake a due diligence process to ensure the merger was in their members’ best interests and would be completed by mid-year, a joint statement said.
The funds would also consider how they could share and leverage each other’s services to deliver better outcomes for members.
The statement noted the fund had common values and cultural alignment, a similar member base, a shared understanding of the value of financial advice, and a commitment to putting members first.
“Through the benefits of increased size and scale, First State Super and WA Super members will be supported to prepare for the kind of retirement they deserve, through strong, sustainable long-term investment returns, reduced fees over time, and access to innovative products and services to support their needs, now and into the future,” it said.
First State Super chief executive, Deanne Stewart, said the merger would allow access to a more diverse pool of global investments, and lower member, investment, administration, and trustee fees which would help deliver better outcomes for members.
Also commenting, WA Super chief executive, Fabian Ross said: “We recognise in the current superannuation environment that size can make a difference. With size comes scale, which can have a significant impact on our members’ fees, returns and ultimately their long-term retirement savings.
“Rather than sitting back and waiting to see what is going to happen, it is important that we work in our members’ best interests. We have chosen to take a pro-active stance by considering how we can achieve the benefits that size and scale can bring, with the right merger partner.”