Australian Retirement Trust, Brisbane, and AvSuper, Canberra, signed a memorandum of understanding that kickstarts a due diligence process to explore a merger between the two super funds.
"Any potential merger will only progress if both funds determine that doing so would be in each of their members' best interests," ART, which has A$240 billion ($166 billion) in assets, wrote in a statement on Wednesday. The MOU was signed on Monday.
If the due diligence process goes well, the funds will work towards starting the merger process late this year or early next year, AvSuper wrote in a separate statement.
AvSuper, which has A$2 billion in assets, was impressed by ART's strong history of serving the public sector and having an extensive defined benefit capability, Ben Firkins, AvSuper chairman, said in the statement.
AvSuper previously explored a merger with another fund, the Commonwealth Superannuation Corp., having signed an MOU in May last year.
However, the proposal was "unable to proceed under the current legislative timetable as required changes were unlikely to be delivered in 2023," Mr. Firkins said.
"The reasons for our original decision to initiate the EOI (expression of interest) process remain and a merger continues to be a necessary step forward in members' best interests," he said.
If the merger proceeds, it will mark ART's fourth merger in a little over a year. ART is one of Australia's biggest superannuation funds and was formed through the merger of Sunsuper and QSuper, both based in Brisbane, in February last year. In April, the fund announced it would merge with the A$8 billion Australian Post Super Scheme, Melbourne.