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Super-size me: fund merger to take place
Holding Redlich and Deacons Lawyers are advising on one of the largest mergers of industry superannuation funds in Australia, creating an organisation with assets worth $20 billion and more…
Lawyers Weekly
Holding Redlich and Deacons Lawyers are advising on one of the largest mergers of industry superannuation funds in Australia, creating an organisation with assets worth $20 billion and more than one million members.
Gray said the merger was due to complete immediately before midnight on 30 June and was being effected by way of a successor fund transfer, which enables members to be transferred from one fund to another without their consent being required if the fund they are being transferred to provides rights and benefits equivalent to those of the existing fund.
This was a preferable option to giving notice and providing disclosure to more than one million members, the logistics of which would have required a large amount of administrative work on the part of the funds.
Gray said superannuation lawyers in Australia were seeing a lot of successor fund transfer work as a result of changes to APRA’s licensing rules, effective on 1 July, which require all superannuation fund trustees to have a licence.
“A lot of funds have decided that is not an appropriate step to take,” she said, “so over the last year we have seen a lot of funds merge and transfer into other arrangements.”
She said the merger of the ARF and STA was by far the largest. “One interesting aspect has been that to some extent we are dealing with a moving target.
“Each fund has continued to admit new employers and members and each one has continued to take in other funds on a successor fund transfer basis. One important responsibility is to give advice to the board of the trustee confirming the transfer can go ahead because they do have equivalent rights in respect of the benefits.
”We have also been looking at all of ARF’s agreements with service providers and third parties, and arranging for these to be novated in favour of STA and amended as required.”
At the same time as the merger, and the additional successor fund transfers, STA, which will be continuing the fund, has been in the process of obtaining its licence from APRA, and therefore having to look at all its operations to ensure it complies with the licensing requirements.
