NGS Super and Australian Catholic Superannuation said Wednesday the two funds have decided not to merge, following 12 months of due diligence.
NGS and Australian Catholic Super, both based in Sydney, cited in a news release considerable changes to Australia's regulatory and commercial environments for their decision not to move forward. NGS oversees A$13 billion ($9.3 billion) in retirement assets on behalf of 120,000 members while Australian Catholic Super manages more than A$10 billion in assets for 85,000 members,
Over the past year, executives at the Australian Prudential Regulation Authority have continued to push for industry consolidation, suggesting a minimum scale of A$30 billion will be needed for super funds to deliver the returns members require at reasonable fees.
An NGS spokeswoman said executives cited the Your Future, Your Super legislation that went into effect earlier this year as being a bigger consideration but they didn't detail exactly how those reforms had derailed the merger talks. The legislation included goals such as weeding out perennially underperforming super funds and preventing job-hoppers from accumulating dormant retirement accounts.
A spokesman for Australian Catholic Super couldn't immediately be reached for comment.
Dick Shearman, the chairman of NGS Super, said in the news release that "after careful consideration we're confident the best outcome is for both funds to continue independently."
An NGS spokeswoman provided the following statement from the company: “We will continue to be open to opportunities for efficiencies and scale but will not be actively seeking a merger in the coming months.”
David Hutton, the chairman of Australian Catholic Super, in the same news release said ACS "will continue with our strategy to achieve greater scale into the future."
