Successor fund merger

In 2023, our industry superannuation fund client completed its merger with a smaller energy industry fund, a transaction that brought significant strategic benefits but also presented complex legal and operational challenges. The smaller fund included historical defined benefit schemes that were intricate and heavily influenced by legacy public sector rules. To bring in defined benefits for the first time, our client required our specialist support to ensure a smooth transition of the investments, and ongoing compliance with both regulatory and historical scheme obligations.

This was no run of the mill fund merger: the other fund’s complex defined benefit structures necessitated detailed work on interpreting and applying legacy entitlements. Given the public sector history of the incoming fund, this work involved significant engagement with the Office of General Counsel for the relevant State Government, and required balancing technical compliance with the interests of multiple stakeholders. We also assisted with the drafting of the relevant legislation to permit this transfer to occur.

Since that time, we have assisted with responding to member benefit claims, reviewing disclosure documents, and ensuring that historical rules are correctly implemented within the operational and regulatory framework of the merged fund.

Our client successfully integrated the smaller fund’s complex defined benefit arrangements into its broader fund structure, with legacy entitlements properly administered. Our specialist advice has been central to this outcome, particularly because of our extensive experience both with successor fund transfers and defined benefit schemes.