Asset/Care merger will reduce compliance costs
The proposed merger of Asset Super and Care Super has come about in part to help reduce the regulatory burden of the Stronger Super regime, according to Asset Super chief executive John Paul.
"We've had the strategy to look at merger options for some time now as a way of growing the fund, and that included looking at smaller funds to merge into Asset or us going to a larger fund. Certainly [Stronger Super] and MySuper and has added to the competitive pressures in the marketplace," Paul said.
He added that the merger itself most likely to take place in September 2012.
The chairmen of both funds released a joint statement today, which stated the Government's Stronger Super proposals had created an environment where a merger would create economies of scale for both funds, along with "long-term sustainability for the merged equity".
For his part, Paul said that a larger back office would mean reduced regulatory costs.
"I've got 15 staff in the Asset office, and [Julie's] got 30 at Care, so we'll obviously get a reduction in the staffing costs when it comes to compliance," Paul said.
Asset Super is the smaller fund of the two, with $1.6 billion in assets and 85,000 members - while Care Super has $4.6 billion in assets and 200,000 members.
"Julie Lander will probably be the CEO going forward. They're the larger fund. I'm 63 next year, and you can only have one CEO in an organisation so it's only fair I move aside," said Paul.
When it came to custody, asset servicing and insurance arrangements, Paul said that both funds would most likely retain their current arrangements and only consider changes once the funds were fully merged.
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