Equip Super and TelstraSuper in Talks to Create $41 Billion Pension Fund

Australian pension funds Equip Super and TelstraSuper are in discussions to merge, potentially forming a $41 billion fund. This move marks another consolidation among smaller players in the pension industry.

According to a statement released Wednesday, the boards of both funds have signed a non-binding memorandum of understanding to move forward with the merger. The completion of the deal, pending due diligence, is expected by late next year.

Regulatory pressure has been mounting on Australian pension funds to merge as the government increases scrutiny on fees and performance. Although complex and costly, consolidation is seen as a way to streamline operations. Recently, Australian Retirement Trust announced plans to merge with Qantas Super, while CareSuper and Spirit Super are also undergoing a merger.

Australia’s pension system, which is among the largest globally, currently manages close to approximately $2.7 trillion in assets. Forecasts from Mercer suggest that this figure could more than triple by 2048. The consultancy also predicts that by 2028, only a dozen funds will hold assets exceeding $67.5 billion each, driven by ongoing mergers.

Equip Super, founded in 1931, manages around $23.6 billion in assets. TelstraSuper, the corporate fund for employees of Telstra, manages around $17.5 billion. Together, the two funds serve approximately 225,000 members.

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