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NewsmakersJune 17, 2022

Australian Pension Funds Mercy Super and HESTA to Merge

Proposed deal is the latest in an ongoing consolidation within the industry.

Australian pension funds Mercy Super and HESTA have agreed to merge via a successor fund transfer, the latest deal in an ongoing wave of consolidation among the country’s superannuation funds.

The funds are currently conducting due diligence and aim to complete the merger before the end of the year, says a press release. Once completed, the merger would lead to 13,000 Mercy Super members being transferred to HESTA and its 930,000 members, creating a fund with almost A$70 billion ($48.9 billion) in assets under management.

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After Mercy Super had conducted an analysis of all relevant funds matching its selection criteria for scale and improved member outcomes, its board chose to enter into exclusive talks with HESTA, according to the release, which cites the pension fund’s “strong track record of performance, future sustainability and deep links to the health sector.”

Mercy noted that both funds have a significant female majority among their membership: 80% of HESTA members are women, as are 77% of Mercy Super members.

“In HESTA we have chosen a top performing fund that shares our same commitment to the health sector and those working in it,” Mercy Super CEO Wendy Tancred said in a statement.

Mercy Super, which has approximately $1.7 billion in funds under management, was established in 1962 by the Sisters of Mercy Queensland to provide benefits for employees of Brisbane’s Mater Hospital and other Sisters of Mercy organizations.

The combination is the latest in a slew of recent merger deals among Australian pension funds. In April, pension funds Australian Ethical and Christian Super announced they had signed a memorandum of understanding to transfer Christian Super’s members to Australian Ethical’s super fund. Also in April, Hostplus and Statewide Super announced they were merging after starting discussions last year. And in March, Sunsuper, QSuper and Australian Post Super Scheme merged to create a new pension fund called Australian Retirement Trust.

Kansas Pension CIO Elizabeth Miller to Retire in July

Deputy CIO Bruce Fink has been named interim CIO as KPERS launches national search for successor.

By Michael Katz

Elizabeth B.A. Miller, CIO of the Kansas Public Employees Retirement System, has announced she will retire in July after more than 11 years overseeing the pension fund’s $26.5 billion portfolio.

During Miller’s tenure, KPERS’ investment portfolio nearly doubled in size, to $26.5 billion at the end of 2021 from $13.3 billion in 2011. Meanwhile, the retirement system’s funded ratio increased to 72.5% in 2020 from 59% in 2011. Over the past 11 years, KPERS’ average annualized return was 8.72%, which surpassed its index benchmark by 0.45% and exceeded its 7.75% investment return target.

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Miller became KPERS’ first CIO in 1991, serving at the helm through 1996, and returned to the post in 2011. Miller also served on the KPERS board of trustees when she was appointed by then-Governor Bill Graves in 2000.

“She has provided outstanding leadership to the KPERS Investment Division and service to the Board of Trustees,” KPERS said in a statement. “KPERS congratulates Miller on her retirement and thanks her for over 20 years of service to KPERS. The staff and leadership wish her the best as she starts this new chapter of retirement.”

KPERS Executive Director Alan Conroy has named Deputy CIO for Public Markets Bruce Fink as the retirement system’s interim CIO. Fink has been in his current role since 2013. Prior to joining KPERS, he was director of investments for more than four years at Saint Mary’s College in Notre Dame, Indiana. He was also previously director of investments at Hufford Financial Advisors in Indianapolis, and CIO of the Indiana Public Employees Retirement Fund from 2004 to 2005.

The retirement system is working with executive recruiting firm EFL Associates to conduct a national search for Miller’s successor, according to the press release. Recruitment details will be posted at kpers.org/employment.