Mercer has won the NSW Government’s auction to acquire the state’s back office superannuation business, Pillar Administration with a $35 million bid.
The deal helps shore up Mercer’s place as the second largest outsourced super fund administrator in the country, behind Link Group.
Link had previously been the frontrunner to buy Pillar but its bid was opposed by competition watchdog the Australian Competition and Consumer Commission.
Pillar is Australia’s fourth largest superannuation administration provider, with more than $100 billion in funds under administration across 1.1 million member accounts.
Its largest client is First State Super, a major default fund for NSW public servants.
NSW Treasurer Gladys Berejiklian formally relaunched the sale process, which has been off-and-on for years, in May.
Mercer EuroPac president Martine Ferland said the company had presented a compelling bid that reaffirms Mercer’s global commitment to growing its superannuation outsourcing business in Australia.
Treasurer Berejiklian said the $35 million sale was a good outcome for NSW taxpayers and would secure Pillar’s long-term presence in the Illawarra region.
“Ongoing public ownership of Pillar was not in the interests of Pillar’s clients, staff or NSW taxpayers,” Berejiklian said.
“Mercer is better placed to invest in Pillar to ensure it continues to meet the needs of its superannuation clients and members.”
Mercer managing director & pacific market leader Ben Walsh said the acquisition would add value for Pillar’s existing clients.
“Specifically, we know many super funds are seeking a proactive and sustainable business partner who can provide superior administration and related services, reduce costs and help funds get closer to members,” Walsh said.
He said heavy investment in “people capability, process innovation and technologies” meant Mercer was well placed to deliver on that.
“We have a high regard for Pillar’s people, values and client base as well as their experience in administering large, complex superannuation funds; and strong position within the Illawarra region,” Walsh said.
Pillar headquarters are in the regional city of Wollongong. A commitment to retain some jobs in the Illawarra region was one of the conditions of the privatisation.
As well as being a super fund administrator, Mercer is one of Australia’s largest actuarial and investment consulting companies and operates the $20 billion Mercer Super Trust.