Merger talks between two superannuation funds linked to the Catholic church have broken down, the Australian Financial Review reports.
The collapse in negotiations between Catholic Super and Australian Superannuation and Retirement Fund, which would have created a $17 billion scheme with 170,000 members, demonstrates the complexity in putting retirement schemes together and comes as the prudential regulator is encouraging retirement funds to consider their future viability.
Industry sources pointed to a raft of merger discussions taking place between industry super funds. Several tie-ups have been announced in the past few months as schemes recognised they did not have a strong future.
Sources said one of the obstacles to agreeing a merger between Catholic Super, which is headquartered in Melbourne, and Sydney-based Australian Catholic Super, was who would chair the enlarged vehicle. It is understood that Catholic Super, which is slightly larger with $9 billion of assets but which has 15,000 few members, wanted to take over the chair, chief executive and chief investment officer roles. The board seats would have been distributed between the two funds equally.
Greg Cantor, CEO of Australian Catholic Super, said the chairmanship was by no means the only issue that could not be ironed out.
“We couldn’t agree on various issues. There were lots of basic governance issues that could not be resolved. The chair was just one of them,” Mr Cantor said.
“The board followed the Australian Prudential Regulation Authority guidelines on mergers and in doing so determined that a merger was not in the best interests of our members at this time.”
It is thought that despite months of talks, the two schemes had not got to the point of signing a heads of agreement and due diligence was never carried out.
Catholic Super, Australian Superannuation and Retirement Fund merger talks collapse (Australian Financial Review)
Catholic Super and Australian Superannuation and Retirement Fund