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Westpac unveils superannuation shake up

BT personal and corporate super are to merge with Mercer, and Advance Asset Management is to be sold, as Westpac shakes up its super businesses

As revealed by Westpac Group (Westpac), the banking group and BT Funds Management have entered into a heads of agreement to merge BT’s personal and corporate superannuation funds with Mercer Super.

As of 31 March 2022, BT’s personal and corporate superannuation funds had total funds under administration of $37.8 billion.

As part of the agreement, BT employees who support these funds will be offered employment at Mercer.

“The Trustee engaged broadly across the industry and after a robust and competitive process this merger will create a larger superannuation fund with the potential to deliver improved performance, lower fees, and broader member services,” BT trustee chair, Gai McGrath, said.

“It also maintains continuity of knowledge and service for BT Super members.”

Westpac has confirmed this merger does not include superannuation held on the BT Panorama and Asgard platforms.

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Meanwhile, Westpac has also agreed to sell its advance management asset business (Advance) to Mercer Australia that reported $43.7 billion funds under management at the end of March.

“This is a further step in the simplification of Westpac and supports the group’s focus on banking in Australia and New Zealand. It also provides significant benefits for BT super members, new opportunities for our people, and redefines the landscape of superannuation in Australia,” Westpac specialist businesses chief executive Jason Yetton said.

“Since the formation of Westpac’s specialist businesses division around two years ago, we have made significant headway on our portfolio simplification agenda, having announced eight business sales, of which five have now completed.”

Westpac said the net effect of the transaction and sale costs and the Advance sale over the remainder of the financial year 2022 and FY23 is expected to be an after-tax gain of $225 million. 

Both are also expected to deliver an increase of approximately 8 bps in Westpac’s common equity tier one capital ratio.

Both the merger and sale are expected to be completed in the first half of 2023.

Earlier this month, Westpac unveiled its financial results for the six months to March this year, reporting that its total loan book reached $719.6 billion, reflecting a year-on-year growth of 4 per cent. 

The group also reported a lift in its Australian mortgage portfolio, which increased by $2.7 billion to $458.3 billion over the six-month period.

[Related: Westpac mortgage book rises despite investor slip]

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