The pair issued a joint statement on Wednesday revealing they have inked a Memorandum of Understanding (MoU) that will kick of a due diligence period.
The funds revealed that prior to the election being called, the government agreed to Commonwealth Superannuation Corporation (CSC) entering into this non-binding MoU with AvSuper to explore this merger.
The merger, which requires government approval, along with the passage of appropriate legislation through Parliament, is seen as an opportunity to bring together two super funds who share a common heritage.
“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,” said AvSuper CEO, Michael Sykes.
According to the funds, this merger will mean that the best features of both organisations are consolidated.
Members of public offer fund, AvSuper, are expected to benefit from CSC’s $60 billion scale in investments, while current and former Australian government employees and Australian Defence Force (ADF) employees and veterans are set to gain a larger, more diversified customer base.
“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’,” said CSC CEO Damian Hill.
Both organisations currently partner with Mercer Administration Services for provision of customer service and administration services, and with AIA Australia for customer insurance.
AvSuper announced in December it was weighing up the pros and cons of a potential merger.
At the time, Mr Sykes acknowledged that the Australian Prudential Regulation Authority (APRA) had been openly encouraging smaller and sub-$10 billion super funds like AvSuper to merge.
In response to these calls and broader changes faced by the aviation industry, AvSuper said that it will be beginning an expression of interest process.
Will veterans needs be met still . Will csc be governed by the government or by a corporation in that will the government have the power to protect members and veterans. Or will a corporation be incharge were profitable outcomes fo companies is the only thing that matters. Could a larger company more diverse in its clients be less able to interpret the different superannuation schemes. Co
I agree with your points wholeheartedly. As with compensation laws, the superannuation changes from DFRB to DFRDB then to MSBS, the changes have not always been beneficial to veterans and the major outcome with compensation was more complicated processes spanning a number of Acts with different outcomes. With superannuation the protection of veterans benefits is the single paramount outcome that should br the baseline consideration in implementation of change that should only be for a more beneficial outcome not yo lessen benefits or place assets st risk! Defence is unique as an employment and career. Distinctly unique, and distinctly seperate from any other employment on this earth.