The Stevedoring Employees Retirement Fund (SERF) and the Seafarers Retirement Fund (SRF) will merge to create one super fund for the maritime industry: Maritime Super. The combined fund, slated to merge January 1, 2009, is expected to have 27,000 members and between $3.2 and 3.5 billion in funds under management.
There has been talk of merging since 1993, when the Seamen’s Union of Australia and the Waterside Workers Federation were amalgamated to form the Maritime Union of Australia. In January 2007, Peter Robertson was hired as chief executive at SERF with the explicit mandate of determining, with SRF chief executive Glenn Davis, whether the proposed merger was in the best interests of each funds’ members.
The increased scale of a combined fund will cut member costs and allow more efficient service, according to Robertson. The merger has been agreed to with unanimous approval from each board and majority member support. The proposed board structure is still to be formally agreed to, but the proposal is for four member representatives, four employer representatives, and independent representation.
Davis said the management structure and service provider relationships were still to be determined, but it was a good opportunity to review everything. Robertson expected the transition to be relatively smooth, as the funds have been aligning their respective portfolios over the past four or five years.
Both funds employed Terry Newson (former FuturePlus chief investment officer) as head of investment advisory services, and there was already significant manager overlap. Uncommon managers will be reviewed pre-January 1, while the common managers will face review post January 1. A tender for custodial services would also take place. SERF currently uses a basic custody service from JPMorgan Worldwide Securities Services, while SRF takes master custody services from National Custodial Services.
Administration would continue to be internal. While it may not be the cheapest option, Robertson said the funds could deliver a superior service internally because of the nature of their memberships.
“The members of both funds are very engaged, with an average account balance over $100,000. They are involved, loyal and concentrated in a few locations. It would probably be cheaper to outsource, but we think we can do it better.”