Australian Retirement Trust, the nation’s second-largest pension, agreed to merge with smaller rival Qantas Super, in the latest sign of mega-funds ramping up their domination of the A$3.9 trillion ($2.6 trillion) industry.
The merger will see ART, with almost A$300 billion under management, add another A$9 billion of assets to its books, it said in a statement Wednesday. Qantas Super was formed 85 years ago as the pension fund of the national carrier.
Australia’s pension pool is forecast to top A$13.6 trillion by 2048, according to analysis by Mercer. It sees a dozen funds controlling more than A$100 billion each by 2028, driven by mergers, organic growth and investment performance.
The industry’s regulator, the Australian Prudential Regulation Authority, has said it strongly supports consolidation, bolstered by an annual performance test that’s shone a spotlight on fees and performance. Still, deals have been relatively quiet lately given the cost and complexity of merging funds.
Qantas Super, with 26,000 members, said last September that it was exploring merger options. ART, which already has 2.3 million members, completed mergers with four smaller funds last financial year, boosting its assets by A$19 billion.
ART said the merger with Qantas Super was subject to further assessments to make sure it was in the best interests of members.
