Warren Chant and Deloitte’s Wayne Walker are each currently running big corporate superannuation outsourcing reviews, both of which have claims on being the most important ever done in Australia.
Warren Chant, of super consultancy Chant West Financial Services, is conducting a tender for the outsouring arrangements of the OneSteel Superannuation Fund. The $1.2 billion, 11,000-member fund, which currently invests through the Russell PST, is administered by Russell Employee Benefits, and uses Total Risk Management (the old Towers Perrin business bought by Russell in 2004) as trustee, represents arguably the largest single corporate super fund outsourcing opportunity to date in Australia.
Two retail master trusts and one industry fund are thought to be shortlisted for consideration by OneSteel’s superannuation policy committee, whose eight members include two trade union representatives, with at least one from the Australian Manufacturing Workers Union.
It is understood the OneSteel committee wants the successful tenderer to provide customised investment options.
Meanwhile the company of which OneSteel used to be part, BHP Billiton, has joined with Rio Tinto in appointing Deloitte’s Wayne Walker and Michael Gomersall to examine superannuation options for the mining giants’ proposed iron ore joint venture in the Pilbara.
The joint venture company, which still requires approval from the European Union, would require between 5000 and 6000 people to shift employment from BHP Billiton and Rio Tinto, taking an estimated $500 million in superannuation assets with them.
The $2.2 billion BHP Billiton Superannuation Fund is also outsourced to Russell, with Total Risk Management the trustee. The similarly-sized Rio Tinto Staff Superannuation Fund runs its own investments with the assistance of JANA Investment Advisers, however it leverages the infrastructure of its member administrator and scheme actuary, Mercer, to provide services like unit pricing.
Both funds have sizeable defined benefit sections.
A new superannuation fund formed for the iron ore joint venture company might initially have modest assets under management, however observers of the Deloitte review process point to its strategic importance, given the high probability that BHP Billiton and Rio Tinto themselves might one day merge.
The successful provider in the Pilbara would arguably have inside running to run super for that entire merged company, meaning that Russell – if one includes the OneSteel tender – has $6 billion of funds under administration at stake in the two current reviews.