The creation of a single large Tasmanian superannuation fund is a step closer after the state treasurer Peter Gutwein announced he favoured a partial merger of RBF with Tasplan and Quadrant.
The proposal still needs the support of all parties in the Tasmanian parliament and needs to overcome legal hurdles that show it will not disadvantage any members.
Under the proposal, the accumulation assets of RBF would be passed to Tasplan to administer in Hobart in a merged fund of $6.5 billion and 165,000 members, while its defined benefit assets would go out to open tender.
Naomi Edwards, chair of Tasplan, said the decision was great news for members, staff and Tasmania – the state government had been weighing up whether to put all of RBF’s assets up for tender after a PwC report in 2013 identified that the fund could be run more cost-efficiently in a larger operation. It is expected that the earliest the merged fund would be up and running is the end of 2016 – Tasplan and Quadrant are on course to complete their own merger on November 30.
The government will undertake a tender process for a new provider for the RBF defined benefits services. The merged fund will be able to participate in the tender process for RBF’s defined benefits services and Edwards confirmed that Tasplan would be keen to retain these assets, not least as it already managed some DB assets for the soon to be merged Quadrant scheme.
She added the merged fund would have greater capacity to invest locally, as it was currently well-below its 5 per cent target for local investments.
Before RBF can be merged into Tasplan, some legal hurdles will need to be overcome. Wayne Davy, chief executive of Tasplan and Quadrant, said: “All three funds will start a process to think about what the merged fund might look like and check that a merger is a good idea. They will make sure members are not disadvantaged by the merger (that they have ‘equivalent rights’), make sure each fund is up to scratch (do their due diligence) and draw up the legal documents.”
More information about the merger is available on Tasplan’s website at www.tasplan.com.au/merger-info.