Westpac and BT Funds Management have entered into a Heads of Agreement to merge, through a successor fund transfer (SFT), BT’s personal and corporate superannuation funds with Mercer Super Trust.
Additionally, Westpac entered into an agreement to sell its Advance Asset Management business to Mercer Australia.
In an announcement to the Australian Securities Exchange (ASX), Westpac said the merger of BT Super and sale of Advance remained subject to certain conditions and regulatory approvals and was expected to be completed in the first half of 2023.
The merger was of BT’s personal and corporate superannuation funds which had total funds under administration of $37.8 billion at the end of March 2022 and included the Westpac employee default plan. Westpac said BT employees who supported these funds would be offered employment by Mercer as part of the agreement.
The merger did not include superannuation held on Westpac’s BT Panorama and Asgard platforms.
The bank said the SFT would result in a small loss as a result of transaction and separation costs and the sale of Advance would result in a gain. The net effect of both over the remainder of FY22 and FY23 was expected to be an after-tax gain of $225 million.
Trustee chair, Gai McGrath, said: “The trustee engaged broadly across the industry and after a robust and competitive process this merger will create a larger superannuation fund with the potential to deliver improved performance, lower fees, and broader member services”.
Vanguard Super has reported strong returns across most of its investment options, attributed to a “low-cost, index-based approach”.
The fund has achieved double-digit returns amid market volatility, reinforcing the value of long-term investment strategies for its members.
Australian super funds notched a third consecutive year of strong returns, with the median balanced option delivering an estimated 10.1 per cent over the 2024-25 financial year, but an economist has warned that the rally may be harder to sustain as key risks gather pace.
AustralianSuper has reported a 9.52 per cent return for its Balanced super option for the 2024–25 financial year, as markets delivered another year of strong performance despite the complex investing environment.