First State Super and VicSuper announced Thursday the start of exploratory merger talks.
A combination of the two would produce one of Australia's biggest super funds, with assets under management of more than A$110 billion ($78 billion).
First State Super — a Sydney-based, not-for-profit public fund that combined in 2010 with industry fund Health Super — boasts more than A$90 billion ($64 billion) in assets under management and 800,000 members. Melbourne-based VicSuper, launched in 1994 for public sector employees in the state of Victoria, oversees A$21 billion for its 240,000 members.
In separate news releases, both super funds said greater scale through a merger could help them achieve better outcomes for their members, in part by opening up broader investment opportunities.
Outcomes could be more mixed for the two funds' external managers. Of First State Super's more than 80 managers and VicSuper's roughly 50, only four overlap.
Both sides said talks are just getting off the ground and won't necessarily lead to a merger.
Spokesmen for First State Super and VicSuper couldn't immediately be reached for comment.
A merger between Sunsuper and AustSafe Super was completed earlier this month, and Sunsuper CEO Scott Hartley said in March there are "lots of discussions." Its tie-up with AustSafe was the second after a similar deal with Kinetic Super in 2017.
Bloomberg contributed to this story.