BHP Billiton’s tender to consolidate its four separate superannuation funds is a harbinger for a year in which fund mergers will dominate discussion. The resources giant’s efforts to create a single, $3 billion-plus fund for its group will join several mergers already in due diligence or underway, including First State Super and Health Super’s proposed $28 billion union (due June 30), equipsuper and Vision Super’s $9 billion get-together (due 2013), the Brisbane-centric marriage of LGSuper and City Super ($5.5 billion and due June 30) and another Queensland merger in ESI Super and SPEC(Q), a $3.6 billion merger originally due in April but now delayed a few weeks by the flooding in that State.

Having a common chairman in Bob Henricks eased the way for the ESI-SPEC merger, as did the decision to combine the entirety of both boards initially, and reduce the numbers as directors’ existing terms expired. Other proposed mergers are in the ‘maybe’ file. An Auscoal- Maritime Super merger looks doubtful after a two-year gestation period, but much will depend on the outcome of a steering committee meeting this month. Meanwhile Westscheme, a $3 billion fund keen for greater economies of scale, is said to be talking to AustralianSuper, having seen Sunsuper-led efforts for a merger of ‘state’ funds fall apart. It’s understood that RFPs for a consolidation of BHP Billiton’s $3 billion-plus suite of funds were sent late last year, and are due by this month.

The Deloitte superannuation practice has been hired to assist, and partner Wayne Walker and director Michael Gomersall will review the responses. The largest of the four schemes, the BHP Billiton No.1 Fund, has outsourced its investment management, member administration and trusteeship to Russell Investments for many years, continuing a relationship which began before Russell purchased Towers Perrin last decade. BHP Billiton’s ‘No.2’ super fund is a legacy of its 2005 takeover of Western Mining. Member admin is outsourced to Plum, and investment management to Plum’s fellow subsidiary of National Australia Bank, MLC.

A third scheme springs from BHP Billiton’s ownership of South African-based manganese producer Samancor, and is outsourced to OnePath, the corporate and retail super provider now wholly owned by ANZ Bank. A fourth scheme relates to BHP Billiton’s Worsley Alumina joint venture, and is outsourced to the Mercer Super Trust. Warren Chant was the consultant behind the decision last February by the $1.1 billion corporate fund of OneSteel, formerly a part of BHP, to fully outsource to the Russell Super Solution Master Trust. BHP Billiton is not the only big super tender in play – January 17 was the last day for responses to a tender which will decide the administrator of the PSS Accumulation Plan, for federal public servants not lucky enough to be part of a defined benefit scheme. The Department of Finance decided to separate the administration of the accumulation and DB schemes, keeping existing provider ComSuper dedicated to the latter funds. The tender is being run by SuperRatings in conjunction with KPMG.

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