For pension plans, consolidation can come with benefits. And around the world, funds are announcing they’re moving forward with plans to merge.

In Canada, members of the United Steelworkers locals at the University of Toronto, University of Guelph and Queen’s University voted in June to create a jointly sponsored plan, with the goal of transferring the five existing pensions into the new plan by July 1, 2021.

And now, two of Australia’s largest pension funds are looking to join forces.

After initial discussions about a merger between First State Super and the Victorian Superannuation Fund, the two plans signed a binding heads of agreement to move forward and will begin a due diligence process.

The merger would create one of Australia’s biggest advice and superannuation businesses, managing more than A$120 billion on behalf of more than 1.1 million members.

“A potential merger is broadly seen as a progressive and proactive step for the two funds, and one that’s very much aligned with the growing trend of consolidation across the superannuation industry,” said an update document released by VicSuper.

Over the coming months, detailed reviews of each fund’s processes will be conducted, with the pension funds considering several operating models. They’ll also have discussions on how to best leverage the combined investment scale to improve member outcomes.

“Our conversations with First State Super have clearly indicated that a merger between our two funds has the potential to offer significant benefits to members, and it’s with their interests in mind that we look to this next phase in our merger discussions,” said Michael Dundon, chief executive officer of VicSuper.

According to the update document, Deanne Stewart, First State Super’s CEO will become CEO of the merged fund following a due diligence process. Dundon will remain with VicSuper to ensure a smooth transition after the merger. In addition, Neil Cochrane, First State Super’s current independent chair, will be appointed chair of the merged fund.

First State Super and VicSuper are aiming to complete the deal, forming one fund and one board, by June 30, 2020.

“We have a lot in common with VicSuper,” said Stewart “We both have a member-first culture and a heritage in the public sector, and we both believe quality financial advice can help our members make the most of their retirement savings.”

In other merger news, Investments and Pensions Europe is reporting that Dutch railways pension fund SPF and public transport scheme SPOV are planning a similar move, with a final decision on the merger expected this fall.