CareSuper and Asset Super will merge into a $6.4-billion superannuation fund on October 26 this year after keeping tax credits worth more than $30 million.

The funds’ initial plan to merge on June 30 was stalled amid uncertainty that the federal government would not allow merging super funds to offset capital gains tax (CGT) losses against future profits. This would have lost Asset Super tax offsets worth about $30 million if it shifted its assets to CareSuper, says John Paul, chief executive officer of the fund.

The $43-billion AustralianSuper and $4.6-billion AGEST Super similarly halted their merger until the government extended the so-called CGT-rollover relief for merging funds beyond June 30. AGEST Super stood to lose about $45 million in tax credits.

Merging in late October will enable Asset Super to finish investment and tax reports after the third quarter, Paul says.

Julie Lander, chief executive of CareSuper, will continue to lead the fund after the merger and four Asset Super trustees will join CareSuper’s nine trustees on the new fund’s board.

Super funds wanting to lower investment and administrative costs are seeking mergers. On March 1, the $320-million UCSuper merged with the $4.1 billion NGS Super. This followed AustralianSuper’s merger with the $3-billion Westscheme on July 1, 2011, and deals that created the $3.3-billion Maritime Super and $2.7-billion Media Super.

Not all proposed mergers succeed. In May, plans to unite Equipsuper and Vision Super into a $10-billion fund were scrapped when the funds disagreed about investment policy.

Paul, 63, is “keeping an open mind” about continuing to work in superannuation once his obligations to finish the merger end. “If nothing is on the wind, I’ll ride off into the sunset and do some travelling with my wife.”

Simon Mumme became a fnancial journalist through a stroke of luck. Upon graduating with a Master of Journalism from The University of Queensland in 2006, he set out to fnd a news organisation that would employ him as an overseas correspondent or business reporter. Or both, ideally. Conexus Financial hired the bright-eyed cadet, and in the ensuing years he wrote for all of its titles until being appointed editor of Investment Magazine in June 2010. Under his guidance, the magazine continues to dominate the Australian institutional investment media through its authoritative, insightful and engaging feature stories and analysis. Outside of work, Simon trains keenly in Muay Thai kickboxing, revels in the surf breaks fringing the Sydney coastline and reads as much high-quality journalism and non-fiction writing as he can. Committed to his role as a niche business reporter, Simon is aware that an overseas posting as a correspondent still eludes him. He hopes Conexus can help him with that career goal too.
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