The merger between Tasplan and RBF Tasmanian Accumulation Scheme will see approximately 90 per cent of the former fund’s members affected as it moves its default offering to a lifecycle product.

The merger was officially approved by the Tasmanian government on Jul y 18 and will create a super fund, $7.1 billion in size.

RBF has run a lifecycle product, MyPath, since March 2014 as its default product, and the board of Tasplan concluded this strategy would best serve their members as well.

“We have a very large number of younger members who are not very engaged, and we really need to be able to do the right thing for them at the early stages of their retirement [saving], as they are not going to voluntarily go into a high-growth option,” said Naomi Edwards, chair of Tasplan.

“We thought it was really up to us to crank up the growth for younger members, particularly in the slow interest rate environment. However, if we had a single investment option, potentially it would have created problems in terms of risk for our disengaged older members.”

Initially the lifecycle product will be split into four life stages: those under 50 years old, and then those aged 50-55, 56-60 and 61-65.

Edwards added that because Tasplan has flexibility from running its own in-house administration system, it was a very simple change to make and control.

“Eventually will be able to customise a lifecycle product however we wish to; for example, they could reflect not only birthdays, but account balance, or any other metric which we choose to incorporate. Having the internal admin system gives us flexibility to start down the voyage of really personalising the default experience for our members.”

The process is currently underway to construct the merged investment team. While details have yet to be made public, Edwards said Ian Lundy, chief investment officer at RBF, and his team, were very highly regarded.

The RBF team also has experience managing three portfolios internally (direct property, commercial mortgages and direct cash), from which Tasplan’s investment team could gain.

Both RBF and Tasplan have “significant” levels of local investment, with RBF owning half of Hobart airport, and Tasplan owning property as well as having a small commitment to business investment.

“We would be hopeful to maintain our local investments, but I don’t think it would be more than about 5 per cent of the fund,” said Edwards.

Meanwhile, it has been confirmed that Wayne Davy, the current chief executive of Tasplan, will be the chief executive of the merged entity.

The new board has also been confirmed. Brian Scullin, Neroli Ellis, John Mazengarb and Rebekah Burton have resigned from the RBF board and have joined the Tasplan board, with the first meeting due to take place on August 12. Former Tasplan board members Tony Stacey and Nick Heath have retired from the board.

The merger is due to be complete by the end of March 2017.

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