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CBA Group Super updates on ART merger plans
CBA Group Super has provided an update on its planned merger with Australian Retirement Trust (ART).
The Commonwealth Bank Officers Superannuation Corporation signed a non-binding heads of agreement in June 2023 and is expecting to finalise an agreement with ART “in the coming weeks”.
The merger will then take place via a successor fund transfer (SFT) where existing Group Super members defined benefit and defined contribution members will automatically transfer to ART.
The merger is planned to take place in two parts; phase one will involve the transfer of members and other beneficiaries with entitlements in Accumulate Plus or Retirement Access and those with defined benefit entitlements.
This is expected to happen on 4 November 2023 and the Group Super accounts will be closed.
The second phase will involve the transfer of members and beneficiaries who were in receipt of a lifetime pension before 3pm on 18 October 2023 or whose instruction to the Group Super trustee to commence a lifetime pension was received before that time into ART in the first half of 2024.
CBA said the decision to split the merger into two parts is “due to the complexity of the different divisions of the fund”.
“The majority of the fund’s divisions are reasonably straightforward and can be merged in a short time frame. The defined benefit lifetime pensions are more complex and as a result will be merged in the first half of 2024,” it said in a statement.
The fund said the benefits of the proposed merger for members include more choice through an expanded investment option menu, flexible retirement products, value for money fees, and access to financial advice about superannuation.
“CBA supports the Group Super trustee’s decision to pursue a merger with Australian Retirement Trust. The trustee worked closely with CBA to understand the future strategy of the fund, and remains closely engaged with CBA,” it said in a statement.
“Similarly to the trustee, CBA as sponsor of Group Super, considered the evolution of superannuation, the increased expectations and need for scale.
“CBA and the trustee both concluded, given the increasing need for scale over time and the long term fee challenges required to ensure the fund remains competitive, that alternatives to continuing a corporate superannuation fund be considered. Australian Retirement Trust would also become CBA’s default super fund for new employees from the time of the merger.”
ART is Australia’s second-largest super fund behind AustralianSuper with $240 billion in assets under management and more than 2 million members.
AUTHOR
Laura Dew
Laura Dew is editor at Super Review. Prior to joining SR, she spent five years working at Investment Week in the UK covering asset and wealth management.
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