The Chair, Anne-Marie O’Loghlin, welcomed members to TelstraSuper’s Annual Members’ Meeting and acknowledged the Traditional Owners of the land and paid her respects to the Elders past and present. She personally acknowledged the Wurundjeri people of the Kulin nation, the land from which she was speaking and any Aboriginal or Torres Strait Islander members who had joined the meeting. 

She provided an overview of the meeting agenda, noting the inclusion of a question-and-answer session. 

She informed members that any information shared this evening is general in nature and does not consider members’ personal circumstances. Members should therefore consider obtaining advice before taking action, read all relevant product disclosure guides and Target Market Determinations; and that past performance figures are not an indicator of future performance.

The Chair noted the following in relation to the Fund’s merger plans:

• In May 2024, the TelstraSuper Board determined that to best serve members’ interests in the long term, it would seek a merger partner aligned with the Fund’s objectives, values and strategy.
• The Board completed a comprehensive review of the industry and assessed a range of superannuation funds as potential merger partners.
• Equip Super was named as the preferred partner in September 2024, and a detailed due diligence process commenced to determine if a proposed merger is in the best financial interests of members. If this is the case, the next stage of the merger process is for the funds to enter into a binding agreement, with the expectation that the two funds will merge in late 2025. 
• The proposed merger is aimed at creating a much larger entity that can offer an enhanced range of benefits and services to members. It is planned to be a merger of equals, bringing together the strengths of both funds into one entity. 
• TelstraSuper has already delivered a number of fee reductions over the last few years and the proposed merger will be looking to deliver further fee reductions due to the increased scale that results from being part of a larger fund.
• The merged entity will operate under the name “Equip Super”, this being consistent with the preferred option of both the Telstra Group and the TelstraSuper Board to move to a separate identity to the Telstra Group. 
• The intention is to combine the financial planning businesses of TelstraSuper and Equip Super.
• It is anticipated that there will not be significant changes to the current arrangements for TelstraSuper members.  
• The timing of the meeting means that not much more can be said about the merger. On finalising the next stage of merger process in the coming weeks, TelstraSuper should be able to share more information with members. 

The Chair introduced the CEO.

The CEO, Chris Davies thanked the Chair and confirmed that TelstraSuper will continue to provide timely updates on the merger plans when possible. 

The CEO reported that while it has been a busy period for the Fund, the team have remained focussed on providing exceptional products and services to its members. During the previous financial year TelstraSuper has launched several new products and services, and has won awards for innovation and advice. 

The CEO addressed the following key points in his discussion:

• In November 2023, the Fund launched the TelstraSuper RetireAccess Lifetime Pension, a guaranteed annuity-style product, delivered in partnership with Challenger, designed to support members to maximise their retirement income. 
• Enhancements to online offerings are making it easier for members to transact with TelstraSuper. The uptake of chatbot is exceeding expectations, which is supported by the ability for a member to connect with a TelstraSuper team member.
• Contributing to TelstraSuper’s winning advice and innovation awards during the year has been:
  • The launch of the Retirement Lifestyle Planner, which allows members to estimate their income at retirement and explore how this may change in different scenarios, such as taking a career break, changing investment options, or making extra contributions.
  • The launch of the Lifetime Income Calculator that can illustrate how three types of income (a Government Age Pension, an Account-Based Pension and a Lifetime Pension) can work to provide a steady income stream to a member in retirement.
  • Access expanded to TelstraSuper’s self-managed style product, Direct Access, to members in retirement, and
  • TelstraSuper Financial Planning now offering aged care funding advice services.

• TelstraSuper members have access to one of the most holistic and comprehensive retirement offerings in the market.
• Webinars have been popular with members, with more than 8,000 members attending sessions on popular topics including our annual investment update, estate planning and getting your super “on track”. 
• TelstraSuper has also reached a milestone in terms of member engagement, with nearly all members now registered for online account access, with two-thirds of members logging into their account during the financial year, and more than $340 million in voluntary contributions paid into super accounts.
• The launch of the High Growth investment option, which has a strong bias towards growth assets like shares and private markets, has seen more than 2,300 members moving some or all of their super funds to the new investment option.
• TelstraSuper Financial Planning has also launched an Investment Choice Selector. This digital advice tool helps members understand their tolerance to investment market risk and makes investment recommendations on TelstraSuper products based on a member’s needs. The tool is available to all members at no cost and can be accessed on a member’s online account. Phone advice remains available to complement and support all members in decisions made based on the tool.
• The fee reduction, delivered to members during the period, has made TelstraSuper’s fees the lowest they have been since inception. 
• Investment returns - except for the Property investment option - have delivered positive returns for the financial year to 30 June 2024.This is despite high inflation, high interest rates and geopolitical uncertainty.
• TelstraSuper has maintained its Rainmaker Environmental, Social and Governance (ESG) Leader rating for the third year in a row. This rating is granted to super funds that Rainmaker considers demonstrate high levels of commitment to ESG principles while maintaining strong investment returns. 
• TelstraSuper’s commitment to fostering and challenging gender equality in the workforce has also been recognised for the fourth time as an Employer of Choice for Gender Equality by the Workplace Gender Equality Agency.
• TelstraSuper is in a strong position with positive net member growth, high member retention rates and a net promoter score ranking the Fund second in the super industry survey. The Fund consistently rates high in the areas of complaints handling, communications, tools and calculators, phone service and the online member portal. 

The CEO emphasised the importance of a member-centric approach in all the Fund’s decision making and the strategic benefits of the merger. 

The CEO thanked all Fund members and introduced the CIO. 

The CIO, Graeme Miller, expressed his privilege in leading the team at TelstraSuper that manages members’ retirement savings.

The CIO reiterated the Chair’s earlier comments that any information shared is general in nature and does not consider members’ personal circumstances and objectives. Members should therefore consider obtaining financial advice before taking action, read all relevant product disclosure guides and note that past performance figures are not an indicator of future performance.

Investment Performance over the 12 months to 30 June 2024
The CIO reported solid investment returns for 12 months to 30 June 2024, with returns net of all investment fees and all investment taxes for members as follows:

• For Accumulation members the Growth option earned 9.6%, the Balanced option earned 8.0%, the Moderate option earned 7.0% and the Conservative  option delivered 4.9%.
• For Retire Access pension members the Lifestyle Growth option earned 9.75%, Lifestyle Balanced option earned 8.6%, Lifestyle Moderate option earned 7.1% and Lifestyle Conservative  option earned 4.9%. It was noted that RetireAccess Lifestyle investment options are designed to have a lower volatility and that members do not pay tax on investment earnings.
• For the Single Sector options Australian Shares and International Shares delivered double digit returns, while Diversified Bonds and Credit, and Cash delivered returns between 4 and 5%. Unfortunately, due to another tough year for commercial property and unlisted property, the Property option delivered a negative return of -6.6%. Property, cyclical like most investments, and the current downturn in the office and retail property sectors, follows a previous period of strong returns. 

The CIO emphasised to members that super is a long-term investment and it is therefore the longer-term returns that are important. He noted the Growth option delivered average returns of 8.1% per annum over the last ten years, and the Balanced option delivered average returns of 7% over the same period, while the Balanced option returned 7.4% per annum since its inception, 27 years ago.

• Changes to the investment menu during the period have been guided by the importance of maintaining an adequate exposure to growth assets over the longer term. These changes are outlined on the TelstraSuper website. 

Key drivers of returns
The key drivers of returns in the diversified investment options in the year to 30 June 2024 was the strong performance of global and Australian shares.

• The strength of share market performance was driven by the resilience of major economies over the period, despite higher interest rates, higher inflation, unemployment remaining low and buoyant consumer spending.
• Another key factor was the heightened investor activity in response to the emergence of Artificial Intelligence (AI) and while AI related shares were the main beneficiaries of investor enthusiasm, the positive sentiment rubbed off on the broader market.  

Performance since 30 June 2024
The CIO reported that all investment options have delivered positive returns since 1 July 2024.

• Returns in the Diversified investment options are between 2.2% and 4.2% for the four- month period to 31 October 2024, with this positive performance spilling over into November 2024 following the outcome of the US election.
• The main driver of the current returns has been the easing of inflation, enabling central banks in many regions to start reducing interest rates. This, combined with higher levels of employment, has bolstered the confidence of investors. The Chinese government’s announcement in September 2024 on measures to stimulate their economy has provided a further boost to investor confidence.
• The positive trend in investment markets over the period was briefly disrupted when the Bank of Japan raised interest rates and the US released weaker than expected job data with the market rapidly recovering its losses.
• Up to date information on all investment returns is available on the TelstraSuper website.

Outlook of Investment Markets 

TelstraSuper remains cautiously optimistic that the economy will avoid a recession, similar to the view held earlier in the year.

• The Fund’s portfolio is close to its long-term strategic position and appropriate for the current environment.
• TelstraSuper continues to monitor closely geopolitical tensions, employment and economic growth to help guide its thinking and stay alert to emerging risks and opportunities. 

Sustainable investment journey 
The CIO provided an update on the Fund’s Environmental Social and Governance (ESG) activities.

• ESG activities cover many different areas, including engaging with Australian listed companies in which it has an interest and voting on the decisions of the company. 
• Climate change is one of the biggest challenges facing the world today and TelstraSuper wants to ensure its investment portfolios are well prepared to meet the opportunities and challenges that transitioning to a low carbon economy presents. 
• TelstraSuper expects the companies it invests in to have sensible plans for this transition.
• The CIO gave an example of climate related shareholder voting activity by TelstraSuper. 
• Climate change also provides opportunities for new investment, while having the potential to deliver strong returns for our members in areas such as clean energy and new technologies that support decarbonisation. Two years ago, TelstraSuper established a goal of investing a total of 1 per cent of its assets (~ $250 million dollars) in climate-change focused opportunities by 2025. The Fund has made good progress towards this goal and is confident of achieving this in the timeframe. 
• For information on the Fund’s sustainable investment activities, members are encouraged to read the Climate Change Action Plan and the latest Sustainable Investment Bulletin, available on the TelstraSuper website. 

The CIO thanked members for trusting TelstraSuper with their retirement savings. He assured members that he and his investment team are committed to managing risk and delivering strong, competitive long-term returns for them. 

The CIO handed back to the Chair.

The Chair, on behalf of the Board, congratulated the CIO and his investment team for diligently managing the members’ retirement savings. 

The Chair provided an update on the governance matters during the reporting period, addressing the following key areas:

• The financial year has seen the Fund build on its three strategic pillars of best outcomes for members, a strong operating model, and to deliver long-term sustainability.
• The Fund’s strategy continues to deliver positive returns for members, with well-funded reserves and a net growth in membership. Most members choose to stay with the Fund upon entering retirement.
• The Fund’s business model continues to focus on quality and efficiency, while continuing to uphold fiduciary duties, adapt to market dynamics and maintain the highest standards of governance and compliance.
• The Board of Directors and advisors, bring a wealth of experience, both individually and collectively. Their commitment to a member-first culture provides a robust governance framework, making the Fund structurally and organisationally strong to meet the challenges of the competitive landscape and future opportunities. 
• During the period, Bronwyn Clere finished her 10-year tenure and Nadine Flood resigned from the TelstraSuper Board. The Chair expressed gratitude to the departing Board members for their significant contribution to the Fund.
• The Fund welcomed Beba Brunt, who joined the Board in December 2023 as an employer representative director and Beth Vincent-Pietsch, who joined the Board in January 2024 as a member representative director.
• Cyber security continues to be a key focus area for the Board. The Board continues to review and monitor security arrangements to ensure the right controls are in place to help protect members’ information and accounts. This includes regular training sessions of all staff, including the Board, and cyber education sessions for members. The open banking service, for example, introduced in late 2023 to validate member account details, provides members with a streamlined and more secure way to complete online transactions. 
• The launch of the Fund’s first Reconciliation Action Plan (RAP) formalises TelstraSuper’s commitment to reconciliation with First Nations peoples. With strong support from the Board, the Fund is dedicated to serving all members and the RAP can help facilitate this task.

The Chair thanked the CEO and the whole TelstraSuper team for their focus on members’ best interests and emphasised the Fund’s commitment to delivering great outcomes and a successful merger process. 

The Chair expressed her honour in chairing TelstraSuper and on behalf of the Board thanked all TelstraSuper members over the last 34 years. 

The Chair opened the meeting to questions from Members.  

She advised that answers to all questions, including those not able to be addressed during the meeting, will be made available on the Fund’s website within 30 days. The questions will also be updated with more information about the merger when available. 

Topic 1.Members joining TelstraSuper

Question: Is TelstraSuper still accepting new members?
Chris Davies (answered in the meeting presentation) 

• It is business as usual, and the Fund continues to welcome new members each week. In October 2024 over 500 new members joined the Personal Plus product, and this does not account for new members joining TelstraSuper from Telstra, Foxtel and other employers.
• New members are very welcome and can join online at the TelstraSuper website or give one of the team members a call and they can help them over the phone.

Topic 2. Merger

Please note, these questions were answered on November 25, 2024 – prior to the signing of a Binding Heads of Agreement with Equip Super. We’ve provided some additional updates post meeting. For the latest merger information – please visit telstrasuper.com.au/merger 

Question: What is the status of merger due diligence? How will a merger guarantee to maintain TelstraSuper service levels? 
Anne-Marie O'Loghlin (answered in meeting presentation) 

• TelstraSuper is in the final stages of due diligence and hopes to share the outcome in coming weeks. 
• Service has always been a strength at TelstraSuper, and it is understandable that members want to ensure that this high-quality service continues in the new fund. 
• It is expected that the current administration and servicing arrangements will continue for all TelstraSuper members and employers with the merger. Serving members in the best way possible has been a critical part of discussions between Equip Super and TelstraSuper.

Post meeting update: 

• The Boards of TelstraSuper and Equip Super have signed a binding Heads of Agreement to proceed with a 'merger of equals' between the two funds. The binding agreement follows the earlier signing of a non-binding Memorandum of Understanding and due diligence process, confirming the merger is expected to be in the best financial interests of the members of each fund.
• Strong member service will remain an integral part of the merged fund's super offering. The merged fund will maintain the personalised service that each fund currently delivers.
• The Funds will continue to operate independently until a successor fund transfer occurs, which is expected in late 2025. The merged entity will then leverage TelstraSuper's operational capability and digital experience to service and support members.
  
   

Question:  I’ve never heard of Equip Super. Why is TelstraSuper merging with an unknown company? 
Anne-Marie O'Loghlin (answered in the meeting presentation) 

• After considering a range of options, Equip Super was chosen as an ideal merger partner as their strengths complement those of TelstraSuper's. Both funds have a core belief in delivering personalised services, guidance and advice to members.
• Equip Super was established in 1931 and has been helping Australians build their retirement savings for more than 90 years. Today, they provide super, financial advice and retirement income accounts to more than 140,000 members Australia-wide. 
• Equip Super manage the super arrangements for some of Australia’s large employers including Rio Tinto, Toyota, Origin Energy and the Archdiocese of Melbourne.
• It is important to note the intent is for a merger of equals, taking the best from both funds into a single entity. 

Question:  Is the defined benefit plan affected in any way, shape or form with regard to the new merger?
Anne-Marie O'Loghlin (answered in meeting questions) 

• Besides the obvious fund name changes, there will not be any impact or change to members' defined benefit accounts, because of the proposed merger between TelstraSuper and Equip Super. 
• Members will not have any change to their entitlements. 
• Telstra will continue to fund the Defined Benefit plan as usual.

Question:  What will the ownership structure of the new entity be? Will members be awarded tradable shares in the ownership
Anne-Marie O'Loghlin (answered in meeting questions) 

• All super funds in Australia operate as trusts, with a trustee being appointed as the legal owner of each fund’s assets. Consistent with this structure, members do not currently hold shares in TelstraSuper and will not hold shares in the merged entity.
• Super fund mergers generally take place by way of a Successor Fund Transfer, where the assets of one super fund are transferred to another super fund. 
• If the merger with Equip Super goes ahead then the assets of both funds will be combined under the existing Equip Super trustee. 
  

Post meeting update: 
The merger will occur via a Successor Fund Transfer (SFT) in late 2025. This process automatically transfers members of one fund to another fund. Before a successor fund transfer can take place, the outgoing and incoming trustee boards must agree that the receiving (successor) fund will provide members with 'equivalent rights' to those the members had in their fund prior to the transfer.

Question: At what number does TelstraSuper fees rank at relative to its peers. Will this fee ranking materially shift with the proposed merger of the fund? What sort of improvement is anticipated?
Chris Davies (answered in meeting questions) 

• Typically, when members are ranking fees relative to peers, they are looking at the ATO Your Super Comparison tool, where the ranking of fees depends upon the member’s age, balance and the investment option they select. There are obviously many variables that need to be assessed on an individual basis. 
• It is expected the merger will result in lower fees for members due to the increased size and scale of the merged fund but are unable to provide any more details at this time. 

Post meeting update:
The merger will achieve significant scale benefits, and as a result members will receive a reduction in the asset-based administration fee to 0.15% and a reduction in the administration fee cap to $750 p.a., from the effective date of the merger of the two funds.

Topic 3. Investment Fund size

Question: Is bigger really better when it comes to Fund size and investment performance?

Graeme Miller (answered in meeting presentation) 

• There are both benefits and challenges in being big and there is not necessarily a perfect size or one-size fits all approach. 
• Ultimately, the Fund wants to be large enough to have a well-resourced team, to be able to negotiate favourable fees, and to achieve economies of scale because what matters most to members is the actual return that hits their accounts - that being the return after the fees are deducted. 
• An advantage of being a mid-sized fund is being able to be more selective about where we invest members’ money. 

Topic 4. Setting up retirement income

Question:  A member that wants to know how they can set up a retirement income.
Chris Davies (answered in meeting questions) 

• The information provided is general in nature and does not consider a members’ personal circumstances and is not intended to be financial advice. Members should therefore consider seeking advice before taking any action.
• TelstraSuper offers two main retirement income products, an account-based pension, and an annuity-style lifetime pension. Members can use either one or a combination of these products, as they have different advantages. And depending on a member’s circumstances, they can be used alongside the Age Pension.
• It is highly recommended that members call the team at TelstraSuper to discuss their individual circumstances. There is no extra cost for this help, and one of the TelstraSuper guidance specialists can talk the member through the options and show them how different scenarios might play out for them. The guidance specialist can also see if the member will be eligible for a Retirement Bonus, which can be up to $8,000 for eligible members. A TelstraSuper team member can be contacted on 1300 033 166

Topic 5. Multi Factor Authentication (MFA)

Question:  I would like to know when TelstraSuper will offer members the security option of Multi-Factor Authentication to login to their accounts? 

Chris Davies (answered in meeting questions) 

• MFA is on the roadmap and planned for delivery early next year.

• TelstraSuper aims to have MFA available for SuperOnline login by March 2025.
• The App login does currently support biometric configuration which is one of the strongest security controls available.

Topic 6. Investments 

Question: What is your assessment of the impact of a Trump Presidency on the US and Global economy - given that almost all economists are saying that Trump’s stated policies of mass deportations and import tariffs are going to be inflationary - and lead to economic contraction in the US?

Graeme Miller (answered in meeting questions) 

• It is always difficult to make predictions about the economy, especially as nobody knows what changes will be made by President elect Trump or when these changes will take effect.
• On the one hand, some of President elect Trump’s stated policies may give a boost to economic growth, for example, lower tax rates and fewer regulations. On the other hand, many of his stated policies around immigration and tariffs may stoke inflation, and if that happens, it could keep interest rates higher for longer, which would likely drag down growth. 
• One of the key principles used by TelstraSuper to manage our portfolios is to keep them well-diversified, and exposed to many different assets, countries and industries. TelstraSuper generally do not make big bets about the direction of the economy.  
• At this early stage, following the election, the Fund’s portfolio positioning is unchanged and substantially in line with the long-term asset allocation targets.

Question:  Regarding TelstraSuper’s investment strategy, what is put in into place to manage the major uncertainty in global economic interdependencies, in particular interdependencies with the US new government administration and the Middle East and Ukraine-Russia war?

Graeme Miller (answered in meeting questions) 

• TelstraSuper have a team of investment professionals that spend a huge amount of time analysing global events and geopolitical developments and always stand ready to adjust the Fund’s portfolios in response to any emerging risks or any emerging opportunities that might present themselves. 
• It is always difficult to be precise and make predictions about this, and TelstraSuper’s preferred way of managing risk is always to have a well-diversified investment portfolio.
  
   

The following questions have been answered following the announcement on 3 December 2024 that Boards of TelstraSuper and Equip Super have signed a binding Heads of Agreement to proceed with a 'merger of equals' between the two Funds. For the latest merger updates please visit telstrasuper.com.au/merger

TOPIC 1. Merger – progress update

Question: What is the status of merger due diligence? Equip Super has a poor reputation for service to members. How will a merger guarantee to maintain Telstra Super service levels? 

Question: Can you please provide an update on your merger plans and the key criteria you are using to ensure an outcome that delivers the best interests of members? 

Question: Please update us on the progress on a possible amalgamation with another super fund. 

Question: Any details of existing or proposed mergers please. 

Answer:

• On December 3, TelstraSuper announced the Boards of TelstraSuper and Equip Super have signed a binding Heads of Agreement to proceed with a 'merger of equals' between the two funds. The binding agreement follows the earlier signing of a non-binding Memorandum of Understanding and a due diligence process confirming the merger is expected to be in the best financial interests of members of each fund. 
• After considering a range of options, Equip Super was chosen as an ideal merger partner as their strengths complement those of TelstraSuper's. Both funds have a core belief in delivering personalised services, guidance and advice to members. 
• The plan is to take the best from both funds. Looking to the future, it is expected that the current administration and servicing arrangements will continue for TelstraSuper members and employers. The merged entity will leverage TelstraSuper's operational capability and digital experience to service and support members and will maintain the personalised service that each fund currently delivers.  
• The funds will continue to operate independently until a successor fund transfer occurs, which is expected in late 2025. 

Question: How many staff will lose their jobs when the merger is completed? 

• The future organisational structure is yet to be determined at this time. 

TOPIC 2. Merger – products and investments 

Question: Looking for some details on the likely merger - and any possible impact on Products or investment solutions and how that will be managed (I know it is early days but interested in plans). 

Question: What is the latest around a super fund merger and will members continue to retain the same investment options, whatever does happen? 

Question: How will the merger affect our fees and performance? 

Answer:

•  The Boards of TelstraSuper and Equip Super have signed a binding Heads of Agreement to proceed with a 'merger of equals' between the two funds. The binding agreement follows the earlier signing of a non-binding Memorandum of Understanding and due diligence process confirming the merger is expected to be in the best financial interests of members of each fund. 
• The two funds' investment menus will be combined taking a ‘best of breed approach’ creating a broader range of options for members to manage their superannuation and retirement savings. Many of our current options have a corresponding version in Equip in relation to the asset allocation although it is expected there will be a couple of additional options added to our current choices.  
• TelstraSuper’s retirement products and services will remain in place and, in time, be adopted by Equip Super members. TelstraSuper’s new RetireAccess Lifetime pension product, which was launched in late 2023, will continue to be offered and be available to all members of the new fund once the merger has been completed. Direct Access will continue to be available for members.
• The merger will achieve significant scale benefits, and as a result members will receive a reduction in the asset-based administration fee to 0.15% and a reduction in the administration fee cap to $750 p.a., from the effective date of the merger of the two funds.   

Question: How will insurances work with the new fund merger? Will employer contributions remain?  
Answer:

•  The current insurance arrangements will remain in place for TelstraSuper members as at the effective date of the merger. 
• It is however, customary for superannuation funds to review their insurance arrangements from time to time to ensure that members can access effective insurance coverage. 

Question: What will the name of the 2 merged funds be and will the current online login remain the same?
Answer:

•  The new merged fund will operate under the Equip Super brand name. This is consistent with the preferred option of both the Telstra Group and the TelstraSuper Board to move forward with a separate identity from the Telstra Group.  
• The merger is one of equals, where the strengths of both funds come together in one entity to form a new fund, for the benefit of all members. 
• The TelstraSuper brand will be retired over time and references to TelstraSuper will change to Equip Super. While the name will change, our member-first culture, objectives, values, beliefs and commitment to delivering strong retirement outcomes for members will not change. 
• The merged entity will leverage TelstraSuper’s operational capability and digital experience to service and support members.
• Members will still be able to access SuperOnline and the App.
• TelstraSuper and Equip Super will continue to operate independently until a successor fund transfer occurs, which is expected in late 2025. 

Question: When I look at Equip Super’s performance it looks much worse than TelstraSuper on a 3- & 5-year basis, yet better on the last year.  Do you understand why these large differences between the two super funds?
Answer:

•  The SuperRatings SR50 Fund Crediting Rate Survey shows that both funds have delivered positive and similar investment returns for the diversified options over 1, 3, 5, 7 and 10-year periods to 30 June 2024.
• In most cases differences in annualised returns are smaller than 0.5%.
• The differences in returns have arisen as a result of differences between the two Funds’ investment strategies and implementation structures. For example, TelstraSuper has typically had higher allocations to unlisted property assets than Equip Super. This strategy has benefited TelstraSuper over longer term periods, but worked in Equip Super’s favour over the last financial year to 30 June 2024.Other sources of differences include different strategic asset allocations, investment managers and dynamic asset allocations.    
• A priority following the merger will be to combine the two Funds’ investment portfolios and develop a common investment strategy for the merged fund. 
• The two funds' investment menus will be combined taking a ‘best of breed approach’ creating a broader range of options for members to manage their superannuation and retirement savings.  
• Many of TelstraSuper’s current investment options have a corresponding version in Equip Super. It is expected in time there will be a couple of additional options added to the current choices.  
• TelstraSuper’s retirement products and services will remain in place and, in time, be adopted by Equip Super members. TelstraSuper’s new RetireAccess Lifetime pension product, which was launched in late 2023, will continue to be offered and be available to all members of the new fund once the merger has been completed. Direct Access will also still be available for members. 
• TelstraSuper members do not need to take any action, their super remains with TelstraSuper and employers can continue to pay superannuation contributions as usual. 

TOPIC 3. Merger – Service 

Question: I'm very satisfied with the performance across the board of Telstra Super, which includes financial and customer service aspects. I'm concerned about the proposed merger and the risk of a reduced member experience as a result. I've also seen several research pieces that refute the 'bigger is better' rationale for the merger. This research indicates that as funds increase in size it becomes more complex and more difficult to out-perform and returns trend down towards industry averages.  
 
Question: Equip Super is an accumulator of Super Schemes and has incredibly poor customer/member reviews, what due diligence did you perform on their customer / member service, as it is very poor and Telstra Super is very good - which we do not want to lose in any merger - how will you control this huge risk to Members? 
 
Question: Why the merger with a super fund that has a low member satisfaction rating? 

Question: Very worried by the talk of amalgamation. As you get bigger service always suffers. Have seen it happen with my bank. 

Question: Impact to super members from the upcoming merger. 
Answer:

•  The TelstraSuper Board completed a comprehensive review of the industry and assessed a range of superannuation funds as potential merger partners. 
• The Board’s goal was to find a merger partner that had shared values, beliefs and a commitment to building and delivering strong retirement outcomes whilst maintaining a more personalised service for members.
• After considering a range of options, Equip Super was chosen as an ideal merger partner as their strengths complement those of TelstraSuper's. Both funds have a core belief in delivering personalised services, guidance and advice to members. 
• A merger with Equip Super will deliver improved size and scale in an industry that is rapidly changing.  
• The merger will create a fund with combined strengths in member and employer servicing, retirement planning, investments and tailored corporate arrangements, including management of defined benefit plans. 
• The merged fund will manage more than $60 billion in retirement savings for around 225,000 members. 
• Service has always been a strength at TelstraSuper so it’s understandable that members want to ensure that this member-centric focus continues in the new fund. It is expected that the current administration and servicing arrangements will continue for the merged fund’s members and employers. 
• The merged entity will leverage TelstraSuper's operational capability and digital experience to service and support members and will maintain the personalised service that each fund currently delivers. This has been a vital part of discussions, as both Equip Super and TelstraSuper want to ensure they are serving members in the best way possible.  
• Members will receive a reduction in the asset-based administration fee to 0.15% and a reduction in the administration fee cap to $750 p.a. from the effective date of the merger of the two funds. 

Question: I have never heard of Equip Super. Why is Telstra Super merging with an unknown company? 
Question: Why is Telstra Super merging with Equip Super rather with one of the leading high performing superannuation funds? 
Answer:

•  The TelstraSuper Board completed a comprehensive review of the industry and assessed a range of superannuation funds as potential merger partners. The Board’s goal was to find a merger partner that had shared values, beliefs and a commitment to building and delivering strong retirement outcomes for members whilst maintaining a more personalised service. 
• After considering a range of options, Equip Super was chosen as an ideal merger partner as their strengths complement those of TelstraSuper's. Both funds have a core belief in delivering personalised services, guidance and advice to members. A merger with Equip Super will deliver improved size and scale in an industry that is rapidly changing.  
• Equip Super was established in 1931 and has been helping Australians build their retirement savings for more than 90 years. Today, they provide super, financial advice and retirement income accounts to more than 140,000 members Australia-wide. As a profit-to-member super fund, they have a history of strong, long-term investment returns and competitive fees.   Equip Super currently has more than $35 billion in funds under management and manages the superannuation arrangements for some of Australia’s largest companies.  
• It is expected that the merger will achieve significant scale benefits and deliver improved retirement outcomes to the members of each fund, whilst maintaining the personalised service that each fund currently delivers.  
• The merger will create a fund with combined strengths in member and employer servicing, retirement planning, investments and tailored corporate arrangements, including management of defined benefit plans. The merged fund will manage more than $60 billion in retirement savings for around 225,000 members. 
• The TelstraSuper Board see this as an exciting opportunity for members as we seek to transition to become a larger entity with an enhanced range of benefits and services offered to members.  

*ends*