The merger will see AustralianSuper create a new Public Sector Division, which will capture and build upon AGEST’s position as a fund of choice for current and former public sector employees, and enhance AustralianSuper’s size, scale and national presence.
 
Both AGEST and AustralianSuper expect that the merged fund will result in improved retirement outcomes for members of both funds, adopting the best from both funds.
 
AGEST CEO Cath Bowtell said today: “This is good news for AGEST members.  The Board of AGEST has identified around $13 million per annum in savings through the merger.  These savings, which are a result of lower administration and investment costs, will go straight to members’ accounts.”
 
“We have also been able to secure changes to AustralianSuper’s offer to reflect the current features of AGEST that our members value.”
 
 As a result of this merger, AustralianSuper will expand its member services in Canberra and Darwin, introduce daily switching, and roll out a very competitive pension fee.
 
“AGEST members have told us that they value these services and I’m pleased that AustralianSuper quickly recognised the benefit to their members of extending these to all members of the merged fund” said Ms Bowtell.
 
However, the merger is not guaranteed, with both funds approving the merger only if the government grants the merging funds relief from realising capital gains and losses when assets transfer from AGEST to AustralianSuper.
 
“The AGEST Board has approved the merger, subject to receiving Capital Gains Tax rollover relief.  Without rollover relief, the merger will not occur” said Ms Bowtell.
 
“Having identified savings for our members, we are keen to get on with the merger and deliver those savings into members’ accounts.  For every month of delay, we fail to realise $1 million worth of savings” said Ms Bowtell.
 
Ian Silk, Chief Executive of AustralianSuper agrees that the uncertainty is preventing mergers from occurring and disadvantaging members. “AustralianSuper firmly believes that members of funds in a merger, must not be placed in a worse tax position after a merger then before the merger.”

“This is a revenue-neutral policy for the Government, because if this change is not made most trustees will simply not proceed with mergers whilst there is a financial disadvantage to their members.”

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In this role, Mr. McKeand will be responsible for the development and implementation of a comprehensive strategy for the construction and management of AustralianSuper’s equities portfolio, which consists of both Australian and international equities across developed and emerging markets.

He will report to AustralianSuper’s Chief Investment Officer, Mark Delaney. Mr. Delaney said the appointment of Mr. McKeand is part of AustralianSuper’s long-running strategy to build world-class, in-house investment capabilities.

“AustralianSuper is a major investor in equities with over $24 billion in our portfolio. Innes’ role will be instrumental not only in growing our equities investments, but also in extracting more value from the portfolio to continue to maximise our members’ returns,” said Mr. Delaney.

“Over the last few years we have focused on growing our in-house investment expertise and now have over 30 investment professionals on the team. Our in-house investment expertise ensures AustralianSuper is in a position to continue to provide strong long-term investment returns to our members.” 

AustralianSuper has returned an average of 6.13 per cent per year, 1.2 per cent above the median fund return, over the ten years to June 2011. This performance places AustralianSuper in the top quartile of performers ten out of thirteen times since 1998, more often than any other fund*.

Mr. McKeand joins AustralianSuper from Aegon Asset Management in the UK, where he was Head of Equities. Prior to this, he was Chief Investment Officer at AIB Investment Managers. Before joining AIB, he was Head of Investment at the Nestlé UK Pension trust and spent 14 years with ScottishLife Assurance Company as Chief Investment Officer.

Mr. McKeand commences his role as Head of Equities at AustralianSuper on 12 September.

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AustralianSuper has today announced the appointment of Western Australian-based Simone McGurk as a Director on the AustralianSuper Trustee Board.

Ms McGurk is currently a Director of the Westscheme superannuation fund, a Western Australian State Training Board member, the UnionsWA Secretary and a member of the ACTU executive.

Elana Rubin, Chair of AustralianSuper, said she was delighted to welcome the first West Australian-based representative to its Board.

“Simone McGurk is an outstanding appointment for AustralianSuper. She has a long history of member advocacy through her 20 years in the union movement.

“She has a strong insight into the issues facing Australian workers and an affinity with the ‘members first’ philosophy of AustralianSuper.

“Simone was a member of the Westscheme Board that demonstrated its ‘members first’ philosophy when it sought a merger with AustralianSuper, knowing our size, expertise and products would provide a positive difference to their retirement outcomes,” Ms Rubin said.

“Irrespective of the proposed merger with Westscheme, Simone is a high calibre appointment and one that reflects the growing geographic diversity of AustralianSuper.

“Simone’s appointment ensures the interests of West Australian members will be well represented and demonstrates AustralianSuper’s commitment to the successful finalisation of the merger,” Ms Rubin said.

Of the thirteen representatives on the Australian Board, seven are from New South Wales, five from Victoria and one from Western Australia.

Ms McGurk replaces Cath Bowtell, who is retiring after being a Director of AustralianSuper since June 2007. Ms Bowtell was an alternate Director from March 2006 and Director from 2007.

“We thank Cath Bowtell for her invaluable contribution to the AustralianSuper Board and wish her well in her future endeavours,” Ms Rubin said.

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“This would be great news for working Australians as AustralianSuper research shows that increasing the super guarantee to 12 per cent means the average Australian worker will be able to afford a more comfortable lifestyle in their retirement.

“For example, for a 20 year old earning $40,000 a year, an increase from 9 per cent to 12 per cent SG could mean over $90,000* more when they retire,”* Mr Silk said.

The Federal Government has announced that the recommendations of a review into its mineral resource rent tax had been accepted.  The new mining tax laws, which will see coal and iron-ore miners pay a resources tax, are expected to go to parliament by the end of the year.

“If passed, this would see the industry closer to that 12 per cent Super Guarantee.  This would make a substantial improvement to most people’s retirement living standards and the nation’s overall wealth,” stated Mr Silk.

“We are very supportive of the government’s commitment to increasing the SG to 12 per cent and encourage them to make this a reality sooner rather than later.”

According to Mr. Silk, certain proposals from the Government’s FoFA reforms will also play an important part in benefiting the community.  Elements such as annual opt-in and a ban on all volume based remuneration will assist all sectors of the industry to operate in the best interests of its members.

“It is essential that the industry supports these reforms, as they are in the best interests of all Australians and will help to build public trust in the investment industry,” explained Mr. Silk.

“We also urge MPs of all political hues to enact these reforms when the time comes as a matter of utmost national importance.”

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AustralianSuper announced today that it has appointed Jason Peasley to the newly-created role of Head of Infrastructure.

Mr. Peasley will commence with AustralianSuper on 14 April and will report to Mark Delaney, Chief Investment Officer.

Mr. Delaney explained that he was delighted to welcome Mr. Peasley to the team, and said that the appointment reflected the strategic importance of investment in infrastructure to AustralianSuper’s growth plans.

“AustralianSuper currently has over $5 billion in infrastructure assets and we plan to grow investments in this area significantly over the next few years,” Mr. Delaney said.

“Jason’s skills and expertise will complement those of the existing in-house team and our managers to help us achieve this goal.”

Mr. Delaney explained that investment in infrastructure was both strategically and philosophically important to AustralianSuper.

“Not only does investment in quality infrastructure projects have the potential to provide excellent returns for our members, but it also delivers benefits to the wider community in Australia,” he said.

“AustralianSuper currently invests in assets, such as Pacific Hydro, which are projects on a scale of national importance. We are looking to increase our holdings in assets of this scale and significance in future.”

Jason Peasley has over 16 years’ experience in infrastructure investment, working across infrastructure acquisition, finance and investment management in Australia, Europe and the United States.

Most recently, he was Founder and Director of Artisan Investment Managers, an independent boutique adviser for infrastructure investors and operators.

Prior to that, Mr. Peasley served as Director and Head of Transactions at Hastings Fund Management, and Director of Infrastructure at Deutsche Bank AG.

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AustralianSuper today announced its support for ASIC’s new personal finance website MoneySmart, launched this afternoon by the Prime Minister, Julia Gillard.

MoneySmart aims to help people make good financial decisions by providing free, independent and unbiased information, tools and motivation and is a key part of the National Financial Literacy Strategy, also launched today.

Ian Silk, Chief Executive of AustralianSuper and a member of the Australian Government  Financial Literacy Board, said that he was fully supportive of any initiative that could improve the financial wellbeing of Australians.

“AustralianSuper is strongly committed to helping both our members and the wider community make better decisions about their financial future, and particularly their super.

“We feel that the simple and straightforward information and tools available on MoneySmart will help consumers to get better educated about their finances and help them to maximise their financial and retirement outcomes.”

Mr. Silk added that AustralianSuper has seen from experience that there is demand from consumers for tools and resources that can help them make the most of their financial situations.

“We know from the popularity of the tools on our own website, such as the Retirement Income Calculator (RiC), that consumers are looking for this sort of accessible, easy-to-use information online.

“We think MoneySmart will be a great complement to steps already taken by organisations such as AustralianSuper in the superannuation space, and will help to educate and empower the community on wider financial matters.

“We would like to encourage others in the industry to follow this lead and focus on providing clear and accessible resources, in plain language, to their customers and to the wider community.”

www.moneysmart.gov.au

www.australiansuper.com/calculators

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In one of the most significant moves in the superannuation industry, AustralianSuper, Australia’s largest industry fund, and fellow industry player, the 200,000-plus member WA-based Westscheme, today announced that they plan to merge.

To take effect on 30 June 2011, after the completion of the due diligence process, the merger will take AustralianSuper to over 1.7 million members, 150,000 employers and over $40bn in funds under management (FUM). One in four West Australian workers will be members of the fund.

In a joint statement, AustralianSuper Chief Executive, Ian Silk, and Westscheme CEO, Howard Rosario, said that, above all else, the merger is about securing members’ retirement futures through AustralianSuper’s size, scale and capability to lead the industry on long term investment performance, low fees and net benefit for members.

It also reflects the strong alignment between the funds’ respective philosophies and, in particular, their shared goal of better outcomes and advocacy for members.

“By merging into AustralianSuper, Westscheme members will benefit from our size and expertise which will make a real difference to their retirement outcomes,” said Mr Silk.

Mr Rosario revealed that Westscheme’s ‘member first’ focus led them to look at a merger as a way to secure the best possible long-term outcomes for their members.

“AustralianSuper is a fund that has shown the potential to deliver our members strong, long-term investment performance and low costs. Members will also benefit from  the enhanced services and products that AustralianSuper provides, including a market-leading insurance offering,” he said.  “And, in a changing landscape in which funds are facing increasing challenges, the Westscheme Trustee were attracted by the advantages of joining with Australia’s leading industry super fund.”

Mr Silk said that, fundamentally, the decision to merge with Westscheme was an easy one.

“AustralianSuper has a very strong vision about the future of superannuation in this country and we are determined to play a leading role in shaping that future in the interests of our members,” he said.

“Our vision includes expansion to enable us to deliver the best prospects for secure retirement to the greatest possible number of Australian workers. This merger offers us the chance to do both, and to demonstrate our very strong capability and commitment in this regard.”

With merger talks progressing throughout the industry, Westscheme has leapt ahead of the pack in making the decision to secure its members’ futures by joining with AustralianSuper.

The merger will see the creation of a new, separate division within AustralianSuper, servicing both Westscheme members and most AustralianSuper members in WA. The new Westscheme division will service more than 35,000 employers and 310,000 members with $5 billion in funds under management. The division will be serviced by the funds’ combined staff – West Australians providing services for West Australians, in Western Australia.

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