First State Super and Health Super Plan To Merge – Reuters

First State Super and Health Super plan to merge, Reuters reported. The transaction would form the fifth largest private pension fund in Australia, the firms said. The two funds together have A$28 billion ($27.48 billion) in funds under management.

(Reuters) – Australia’s First State Super and Health Super plan to merge to create the nation’s fifth largest private pension fund, the firms said, in a deal that could spark more consolidation as funds in world’s fourth-largest wealth management market aim to cut costs.

The combined funds would have over A$28 billion ($27.48 billion) in funds under management and more than 750,000 members.

Their merger comes as Australia has proposed pension reforms that aims for lower management fees and holding of more capital in the $1.2 trillion sector.

The funds have agreed to work towards a target merger date of 30 June 2011, subject to a due diligence process, they said in a joint statement.

($1=1.019 Australian Dollar)

(Reporting by Narayanan Somasundaram; Editing by Balazs Koranyi)