Qantas Super Trustee Board agrees to enter into agreement to merge with Australian Retirement Trust

Australian Retirement Trust considers ESG factors across all investment options, and also offers a Socially Conscious Balanced option for members who want to invest their superannuation according to an extended set of ESG principles.

You can find information on Australian Retirement Trust’s approach to sustainable investing at Sustainable Investing | Australian Retirement Trust

You can find information on Australian Retirement Trust’s Socially Conscious Balanced option at Socially Conscious Balanced | Australian Retirement Trust

If you were to roll over your account to Australian Retirement Trust prior to the merger, you would not be part of the planned Qantas Plan within Australian Retirement Trust, nor would you be identified as a former Qantas Super member. Therefore, you would not participate in any special arrangements negotiated for former members of the Qantas Plan. As we work through the merger implementation plan and get closer to the transfer date, we will provide more detailed information to members.

All Qantas Super members will be given notice in the months leading up to the transfer to Australian Retirement Trust to advise of the cut-off dates for new applications. All income account arrangements will be transferred over at SFT date.

If you are a member of both Qantas Super and Australian Retirement Trust with insurance cover in both funds, you will have two super accounts and two sets of insurance cover following the merger.

The Transfer Guide you will receive from Australian Retirement Trust closer to the merger date will set out the arrangements for multiple accounts in detail, including circumstances where your account may be automatically consolidated following the merger (retaining the combined amount of Death and TPD cover) and the circumstances where your accounts will remain separate and you may be contacted by ART to discuss your options (for example, if you have income protection in your ART account).

Australian Retirement Trust will provide a dedicated contact number and email address for you to ask questions.

Yes. Defined Benefit members with grandfathered concessional tax arrangements will continue following the merger with Australian Retirement Trust.

The formula for calculation of your income protection cover will be unchanged under Australian Retirement Trust. The waiting period and benefit period will also remain the same. There will be some minor changes in relation to the commencement and cessation of income protection cover.  You will receive details of these changes closer to the transfer date.

You can see Qantas Super’s latest investment performance for all investment options via this link. Super investment performance | Qantas Super

You can see Australian Retirement Trust’s latest investment performance for all investment options via this link. Super investment performance | Australian Retirement Trust

When comparing Qantas Super’s and Australian Retirement Trust’s investment performance you should consider making an apples with apples comparison. For example, comparing like investment options from a risk and asset allocation perspective, over the same time periods, with the same end dates.

Qantas Super’s investment options will be ‘mapped’ to Australian Retirement Trust’s investment options. That means we will be mapping each of our investment options to Australian Retirement Trust’s most similar investment option.

Our aspiration is that beneficiary nominations will transfer across to Australian Retirement Trust and we are currently working through this issue from a legal and administrative perspective. As we work through the merger implementation plan and get closer to the transfer date, we will provide more detailed information to members.

The merger is in the early stages, and you will receive further information as it progresses. However, you can also refer to Australian Retirement Trust’s website for information on their investments. Their Investment Guide, which can be found on their website, explains they use daily unit pricing. You can also find more information regarding investment performance and unit prices here.

We understand that it may not be obvious to members why Qantas Super should merge with Australian Retirement Trust. After all, we’re a top performing super fund, with products that are Gold and Platinum rated by an independent ratings agency. However, it’s the Trustee’s job to not only look at what’s going well today, but also to recognise what could be better, to look forward to how Qantas Super will likely fare in the future if it remains operating in its current configuration and to consider the different strategic pathways available.

Having considered all these issues, and taken on‑board specialist independent advice, the Trustee Board concluded that it would be in members best financial interests to merge Qantas Super with another super fund. Why? There are three key issues:

Competition: For many years the super industry has been consolidating into a smaller number of ever larger super funds. In fact, in 2004 there were 761 corporate superannuation funds and as of June 2022 there were just 11 corporate funds remaining. Since then, Commonwealth Bank Group Super, the fund for Commonwealth Bank employees, has commenced a merger with Australian Retirement Trust, while Telstra Super, the fund for Telstra employees, has announced its intention to explore merger options. The largest super funds now have memberships and assets under management that are many, many multiples that of Qantas Super. While size isn’t everything, economies of scale are important, and they provide these larger funds with opportunities to make significant investments in their products, services and member experiences as well as to drive down costs per member.

Legislation/regulation: As the super industry has grown, the legislative and regulatory requirements placed on super funds have substantially increased. These changes usually make a lot of sense, as we all want a better run and more secure super system. However, some of these changes also hurt super funds like Qantas Super. A great example is a recent change in how superannuation guarantee contributions are treated if new employees don’t make an explicit super fund choice. The intent of the change was to reduce the likelihood of people unintentionally having multiple super accounts – a worthy goal – however one of the side effects of this change is that Qantas Super will not grow its new membership as much as previously expected.

Sustainability: Like any member-driven organisation, we need to be confident that we can sustainably deliver for our members now and in the future. As we project forward, Qantas Super looks like it will be less sustainable in the future than it is today and has been in the past. For example, the following factors have been important considerations; larger super funds deal with thousands of employer groups and we only deal with one, COVID‑19 dramatically changed the demographics of Qantas Super’s membership, legislative changes mean Qantas Super will likely grow less than planned etc. As such we think our members would likely be better served by being part of a larger super fund with a broader membership and a healthier cash flow profile.

Taking all the above factors and others into consideration, and after lengthy deliberation, the Trustee Board concluded that it would be best to explore merger options, when Qantas Super is well positioned to do so (i.e. with competitive investment performance, products and services provided to members), rather than wait until circumstances might force us down this path in the future.

In the nine months since September 2023, the Trustee has considered the range of merger options that are available to Qantas Super, and we have refreshed our assessment of the outlook for Qantas Super under its current operating model. After a rigorous evaluation process, we have now confirmed that Australian Retirement Trust is our preferred merger partner, and that a merger by way of a Successor Fund Transfer (SFT) would be likely to provide superior sustainable outcomes for members compared to a continuation of the current structure.

With both Qantas Super and Australian Retirement Trust deeply committed to doing the right thing by our members, we will work towards a merger together, with the merger to only proceed if we believe it is in the best financial interests of members.

Australian Retirement Trust is one of Australia’s largest super funds, with over 2.3 million Australians trusting them to take care of close to $300 billion of their retirement savings.

For more information on Australian Retirement Trust, please refer to their website here.

As one of Australia’s largest super funds, Australian Retirement Trust will provide Qantas Super members a broader range of quality products and services at competitive fees and insurance premiums.

Importantly, Australian Retirement Trust is one of the largest defined benefit administrators in Australia and has the skills and experience to administer a complex fund like Qantas Super with both defined benefit and accumulation divisions.

With these factors in mind, the Qantas Super Trustee is confident that a merger (by way of a Successor Fund Transfer [SFT]) with Australian Retirement Trust is the best path moving forward and will deliver value for members leading into and during their retirement.

The Trustees of Qantas Super and Australian Retirement Trust have agreed to progress work on merging Qantas Super into Australian Retirement Trust by way of a Successor Fund Transfer (SFT).

During this next phase, both Trustees and the Qantas Group (as the Plan Sponsor) will be working towards implementing the SFT and finalising other legal documents such as the governing rules of the Qantas Plan in Australian Retirement Trust. Both trustees will also finalise the SFT Deed.

The merger will occur via a Successor Fund Transfer (SFT), whereby existing members automatically transfer to Australian Retirement Trust.

The requirements for an SFT are set out in legislation. The key requirement for an SFT is the agreement between the transferring trustee and the receiving trustee that the successor superannuation fund will confer on the members’ equivalent rights to those rights the members had in the transferring superannuation fund in respect of their benefits. In addition, the accrued benefits of members cannot be adversely altered as a result of an SFT.

Your Qantas Super entitlements and superannuation account will be transferred to Australian Retirement Trust.

If the SFT proceeds, you’ll receive communications and be invited to information sessions from Qantas Super and Australian Retirement Trust to brief you more fully on the process and answer any further questions you may have. During these sessions, we’ll share more about what having your super with Australian Retirement Trust means to you and address any questions you may have. The information sessions run by Qantas Super and Australian Retirement Trust will be advised at a later date.

Our primary focus is always the best financial interests of members. If, as we expect, the merger goes ahead by way of an SFT:

• Members in defined benefit (DB) divisions of Qantas Super will have their superannuation interests transferred from Qantas Super to Australian Retirement Trust with equivalent rights to benefits that they currently have. This means DB members will transfer to Australian Retirement Trust and their employer will continue to be required to support and fund their benefits in Australian Retirement Trust as they are currently required to support and fund their benefits in Qantas Super. Importantly, the formula for calculating your defined benefits will not change as a result of the merger.
• Gateway and members of accumulation divisions who are current Qantas Group employees will transfer to Australian Retirement Trust and their employer will continue to pay superannuation contributions for these members, but into Australian Retirement Trust rather than Qantas Super.
• Members in our Gateway division who are former Qantas Group employees or spouse members will transfer to Australian Retirement Trust and, if employed, their employer will be able to pay superannuation guarantee contributions for these members into Australian Retirement Trust.
• Pension members (transition to retirement, retirement, and lifetime pension) will have their benefits transferred to Australian Retirement Trust, and their regular payments will be paid from Australian Retirement Trust.
• By virtue of their scale, Australian Retirement Trust will provide a broader set of member services and lower fees and costs for the vast majority of members, compared with the current arrangements in Qantas Super.
• Your level of insurance cover will remain the same in Australian Retirement Trust.

Importantly, the Qantas Group remains committed to fully funding its superannuation commitments for all employees.

As the SFT process is governed by legislation, there are various legal checkpoints that need to be complied with before we implement a merger. Experience from other superannuation fund mergers indicates that it could take up to 12 months to fully implement a merger.  We are now working closely with Australian Retirement Trust and our advisors to satisfy all the legal requirements and prepare for implementation of the merger.

No, members are not able to vote on merger proposals.

Superannuation legislation requires that super fund trustees are the ones who must consider, and if appropriate, approve any SFT proposals to merge one super fund into another. As an SFT does not require individual members to consent to the transfer there are rigorous legal requirements involved that must be met by the trustees of both the transferring super fund and the receiving super fund.

Yes, Qantas supports the Qantas Super Trustee Board’s independent decision to pursue a merger with Australian Retirement Trust. As a key stakeholder in the merger process (which impacts a significant number of current and former Qantas Group employees), Qantas has been consulted through the process undertaken by the Qantas Super Trustee and will continue to work closely with the Qantas Super Trustee and Australian Retirement Trust to deliver a merger in the best financial interests of members.

No, the Qantas Group and its management did not make or force this decision.

The decision to explore merger options was made by the independent Qantas Super Trustee Board, which oversees and governs Qantas Super, on the basis that it is in the best financial interests of members to do so. The Trustee Board is comprised of an equal number of Company-appointed and Member-elected Directors and the decision to explore merger options was a unanimous decision of the Board.

Importantly, when the SFT occurs in the future, your employers’ obligations to make superannuation contributions remains. This means that, for defined benefit members, their employer will continue to be required to support and fund their benefits in the new fund, in the same way they are currently required to support and fund their benefits in Qantas Super. Any accumulation members will also have their employer pay superannuation contributions into the new fund.

One of the key criteria we had through our comprehensive assessment process was finding the right partner who could provide our members with competitive fees and costs.

For members who currently pay administration fees in Qantas Super, we expect these fees will decrease for the vast majority of members when their membership is transferred to Australian Retirement Trust. Further information will be available closer to the transition date.

Members in a number of our defined benefit and accumulation divisions have some, or all, of their administration costs and insurance premiums paid by their employer. This will continue in Australian Retirement Trust.

We know that the insurance cover provided by Qantas Super is an important benefit for our members. As such, we have sought similar insurance arrangements in Australian Retirement Trust. More information will be provided closer to the transfer.

Australian Retirement Trust provides similar advice services to those currently provided to Qantas Super members. You will be invited to information sessions in the coming months that will provide details on the transfer to Australian Retirement Trust and Australian Retirement Trust’s member services including how to access their advice services. After the transfer, Australian Retirement Trust will also continue education programs specifically tailored for Qantas Group employees and former employees.

In the meantime, our Super Advice team continues to travel to ports and workplaces around Australia to meet with members; you can book an appointment over the phone or face to face here

You can find details on Australian Retirement Trust’s investment performance at the following link: Super investment performance | Australian Retirement Trust

You can find details on Australian Retirement Trust’s investment options at the following link: Super investment options | Australian Retirement Trust

This is general information only. Further information will be made available closer to the transition date.

Qantas Super is a not-for-profit superannuation fund that is regulated by the Australian Prudential Regulation Authority (APRA). The superannuation assets are held in trust for our members and are held separately from any Qantas Group assets. A surplus arises at any point in time when the value of a super fund’s assets at that time exceeds the total of all accrued benefits and the total of all liabilities including costs and taxes. If the merger goes ahead, all Qantas Super assets and liabilities will transfer to Australian Retirement Trust as the Successor Fund. In effect, any surplus will be transferred.

If the SFT proceeds, the Trustee has requested that some of the costs incurred in the merging of the funds are shared with Australian Retirement Trust. The Qantas Group has agreed that the remaining costs will be paid from the Plan’s general assets. This means that merger costs will not impact the fees charged to Qantas Super members, or their benefits.