Aware Super and TelstraSuper sign deal to assess merger

Aware Super and TelstraSuper have announced the signing of a non-binding Memorandum of Understanding (MOU) to explore a potential merger between the two superannuation funds.

The proposed merger would create a combined profit-to-member fund with approximately $228 billion in funds under management and serve over 1.3 million members.

Both organisations are undertaking a comprehensive due diligence process to ensure the proposed merger is in the best financial interests of their respective members.

TelstraSuper noted that the potential merger represents a significant opportunity to build scale and enhance outcomes for members of both funds.

"Aware Super is a highly regarded, award-winning fund with the scale to help deliver improved retirement outcomes for members," says Anne-Marie O'Loghlin, TelstraSuper chair.

"It is expected that the proposed merger will deliver lower fees, an expanded investment menu and a national servicing footprint to help TelstraSuper members further enhance their planning and transition into retirement."

Aware Super chair Christine McLoughlin suggests that the proposed merger presents a compelling opportunity to unite two funds that she said share a deep commitment to member-first values.

"TelstraSuper's legacy of personalised service and member loyalty aligns seamlessly with Aware Super's focus on being super helpful, super easy, and delivering super returns.

"We also look forward to welcoming TelstraSuper's strong corporate employer relationships and specialised capabilities that will significantly accelerate our corporate super offering.

"Together, we can amplify our strengths to deliver even greater retirement outcomes for our members, with market-leading retirement offerings, truly personalised help and guidance and global investment capabilities."

Pending the outcomes of due diligence, it is expected that the merger would be executed via a successor fund transfer in the fourth quarter of the 2025-26 financial year.

While the due diligence process is underway, both funds will continue to operate independently with no disruption to members or employers.

This comes after TelstraSuper and Equip Super saw merger plans axed in May, with TelstraSuper saying it was unlikely to achieve its objectives.

TelstraSuper decided to terminate the Heads of Agreement the two funds signed late last year, saying it was not going to be in the best interests of TelstraSuper members.

They had been in discussions since at least September, when they first announced a MoU had been signed.

It was to be a "merger of equals" which would have created a $60 billion fund, home to more than 225,000 members. However, TelstraSuper noted that it had become evident it could not proceed.

"Bringing together two medium-sized funds is a complex process.

"As the merger process has progressed, and particularly in the period since the binding agreement was signed, it has become evident that TelstraSuper is unlikely to achieve our objectives for the merger, in the best financial interests of the fund's members."

This article first appeared on Financial Standard

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