Westpac said that the two transactions will result in an after-tax gain of A$225m ($160m) over the remaining period in this and the next financial years
Westpac head office in Takutai Square, Auckland. (Credit: Ingolfson/Wikipedia)
Westpac has agreed to merge BT Funds Management’s (BT’s) personal and corporate superannuation funds with Mercer Super Trust, through a successor fund transfer (SFT).
In addition, the Australian bank has signed an agreement to divest its Advance Asset Management business (Advance) to Mercer Australia.
Under the terms of the merger deal, Mercer will provide jobs to BT employees who support the funds.
The merger of BT’s funds and the sale of Advance are expected to be completed in the first half of 2023, subject to certain conditions and regulatory approvals.
BT Super trustee chair Gai McGrath said: “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. It also maintains continuity of knowledge and service for BT Super members.”
BT Financial Group is an Australian wealth management company, which has been completely acquired by Westpac in 2002.
BT’s personal and corporate superannuation funds had total funds under administration of A$37.8bn ($27bn) at the end of March this year.
The merger will include Westpac employee default plan but excludes superannuation on Westpac’s BT Panorama and Asgard platforms.
Upon closing of the transaction, the merged fund will manage more than A$65bn ($46bn) and help more than 850,000 Australian investors.
Advance is a multi-manager investment business that offers specialist funds management services and products, including certain investment options offered through BT Super.
It manages several products available through BT Panorama and had total funds under management of $43.7bn at the end of March 2022.
Westpac said that the two transactions will result in an after-tax gain of A$225m ($160m) over the remaining period in this and the next financial years.
Westpac specialist businesses chief executive Jason Yetton said: “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.
“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.”