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Active, Vision tie-up drains the small fund holdouts

Active Super and Vision Super will press ahead with a merger that will "lower costs and improve member services" in a sign of the times for smaller super funds.

Vision Super and Active Super will push ahead with a merger that will create a new fund with $27 billion in FUM, 170,000 member accounts and a “broader geographic presence” across NSW and Victoria. Merger talks were announced almost exactly a year ago, with Vision Super chair Lisa Darmanin flagging the similar member bases – Vision is the rebranded Local Authorities Super, while Active is the rebranded Local Government Super (LGS) – and similar size of FUM.

“Our two funds have a lot in common,” Darmanin and Active chair Kyle Loads said in a release.  “The combined strength of a single fund across NSW and Victoria, with a focus on delivering strong retirement outcomes for members, will serve our members in local government and beyond for decades to come.”

“Over time, combining the funds, streamlining our offerings and moving onto Vision Super’s internal administration platform will translate into lower costs, improved member services and innovative technology. We expect to see cost savings and greater economies of scale as time goes on. Those synergies will mean strong benefits to members of both funds.”

The merger is another sign of the times for small funds, with Active Super having rebranded from LGS in an explicit attempt to retain current members and attract new ones. Unaware that the fund was public offer, current members were not holding on to their account when they moved jobs and prospective new members assumed that they couldn’t join.

“All the numbers indicate that it absolutely has worked,” Active Super chief market officer Chantal Walker told ISN in 2022. “We didn’t alienate the existing base. We are attracting new members from outside the industry. And we’re attracting younger members as well, which is fantastic.”

The decision to rebrand was made in the shadow of comments by then APRA deputy chair Helen Rowell that funds under $30 billion were subscale and wouldn’t be competitive against their megafund brethren. At the time, Active Super CEO Phil Stockwell said that a merger wasn’t on the cards and that Active’s size allowed it to invest in areas off-limits to larger funds and offer more personalised service to members.

Stockwell will now leave the fund in early July, with current deputy CEO Donna Heffernan placed in the acting role to shepherd the merger through. Stephen Rowe (pictured), current CEO of Vision Super, will head up the merged entity.

“On behalf of Active Super I would like to congratulate Stephen on this appointment as we work to bring these two funds together,” Loades said. “I would also like to offer my thanks to Phil Stockwell for his leadership as CEO of Active Super over the past three and a half years.”

“Phil has successfully overseen substantial change in a short period of time. He led the fund through Covid, delivered a successful rebrand to Active Super… and returned the fund to net member growth while we continued to deliver solid investment returns for our members.”

The merger follows the $45 billion tie-up between Spirit Super and CareSuper announced last week, and is expected to complete mid-2024. ISN understands that no decision has yet been made about whether to retain the Vision or Active brand.

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