Commonwealth Bank Group Super to pursue merger with Australian Retirement Trust

The Trustee of Commonwealth Bank Group Super (Group Super) has today announced it has entered into a Memorandum of Understanding to pursue a merger with Australian Retirement Trust, one of Australia’s largest super funds.

This merger would see Group Super’s 67,000 members and $12.3 billion funds under management¹ transfer to Australian Retirement Trust, joining an award-winning² fund, with more than $230 billion in funds under management.

Group Super Chair, Trustee Board, Rosemary Vilgan, said today: “For over 100 years, our fund has looked after the superannuation needs of Commonwealth Bank Group employees and their families. Our members’ best financial interests are at the heart of everything we do.”

Superannuation funds under management in Australia now total more than $3.3 trillion dollars³ and are a significant contributor to the economic success of Australia. Given the importance of super, successive federal governments have continued to increase regulation and expectations on superannuation funds including articulating the importance of scale in delivering long term returns for members. Group Super is managed by its trustee, Commonwealth Bank Officers Superannuation Corporation Pty Limited (the Trustee). In consideration of the changing superannuation landscape, the Trustee made the decision to explore options for a potential merger partner.

In making this decision, the Trustee considered the size of the fund, the required investment to remain competitive and the impact of the required investment on members’ fees and concluded that a merger was likely to be a more beneficial way forward for delivering long-term market competitive outcomes for members.

“Though Group Super has delivered good outcomes for members over the years, we are still a relatively small fund, and we know scale is important to deliver long-term outcomes for superannuation fund members.”

“As a large, well-established fund, Australian Retirement Trust can offer a broader range of products and services at competitive fee levels for members. We are confident that a merger would deliver value for our members leading into and during their retirement.”

Australian Retirement Trust’s Chair, Andrew Fraser said Group Super members would be able to benefit from the Fund’s global investment capability and strong long-term investment performance.

“Should the merger progress, Group Super members will benefit from our ability to leverage our scale to seek out world-class investment opportunities and deliver enhanced products and services to all of our members.”

“In addition, we have specialist skills and experience in managing complex defined benefit plans as one of the largest defined benefit providers in the Australian marketplace.”

“Our primary commitment is to ensure we act in the best financial interests’ of all members and the merger will only proceed if it is the best interests of current ART members and Group Super members.”

Joining a much larger fund in Australian Retirement Trust, Group Super members will have the opportunity to access a range of benefits, including:

• Global investment capability, with strong comparative long-term returns across a range of investment options⁴ ;
• Value-for-money fees, including lower administration fees; and⁵
• Enhanced member support, including digital tools, education seminars and financial advice services.

The proposed merger will occur via a successor fund transfer, whereby existing Group Super defined benefit and defined contribution members automatically transfer to Australian Retirement Trust. The defined benefit arrangements for defined benefit members will continue to apply in Australian Retirement Trust and the Commonwealth Bank of Australia (CBA) will continue to fund the defined benefits.

The Trustee remains closely engaged with CBA. CBA supports the Trustee’s decision to pursue a merger. CBA also remains committed to the defined benefit arrangements for defined benefit members of Group Super continuing to apply in Australian Retirement Trust and ensuring employees have access to a market-leading default superannuation offer.

“We are looking forward to working together with Australian Retirement Trust over the next 12 months as we complete due diligence and undertake the transition,” Rosemary Vilgan said.

“In the meantime, we remain committed to delivering quality service for all our members.”

This announcement follows a comprehensive market analysis and the Group Super Trustee’s determination to select Australian Retirement Trust as their preferred merger partner. As a like-minded fund with aligned values, investment philosophy and commitment to members, Australian Retirement Trust is a strong cultural fit with Group Super.

The merger is subject to both funds completing their respective due diligence reviews, agreement on the final terms of the merger and relevant regulatory requirements being satisfied, including that the merger is in members’ best financial interests. Further details in relation to the timing of the potential merger will be provided to members.

This information is not financial advice nor is it a recommendation or statement of opinion intended to influence you in making a decision in relation to your super.

The information has been prepared without taking into account your objectives, financial situation or needs.  Because of that, before acting on the information, you should consider its appropriateness having regard to your objectives, financial situation and needs. You should also obtain and consider the relevant product disclosure statement and target market determination before making any decision about whether to acquire or continue to hold an interest in the relevant product.

Commonwealth Bank Officers Superannuation Corporation Pty Limited (ABN 76 074 519 798, AFSL 246418) is the trustee and issuer of Commonwealth Bank Group Super (ABN 24 248 426 878).  Australian Retirement Trust Pty Ltd (ABN 88 010 720 840, AFSL 228975) is the trustee and issuer of Australian Retirement Trust (ABN 60 905 115 063).

¹As at 30 September 2022.

²Australian Retirement Trust has won Canstar's Outstanding Value since 2011 and Chant West's Best Fund: Member Services 7 times in 9 years

³Australia Prudential Regulation Authority (APRA) Statistics as at 30 September 2022

⁴Super Savings Balanced option has delivered 9.0% p.a. over the 10 years to June 2022, outperforming the comparative industry median over 1, 3, 5, 7 and 10 years: SuperRatings Platinum Performance rating 15 years in a row. Past investment performance is not indicative of future performance.

⁵Super Savings: Canstar’s Outstanding Value Superannuation Award, 5 stars, 2022.

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