Super merger finalised to create $230bn investment giant

The biggest ever merger in Australia’s super industry has been finalised, creating the country’s second largest fund with more than $230bn under management.

Superannuation mergers are on the rise.

The biggest ever merger in Australia’s super industry has been finalised, creating the country’s second largest fund with more than $230bn under management.

The marriage between the Queensland-based QSuper and Sunsuper to create the Australian Retirement Trust (ART) became a reality at midnight on Sunday paving the way for the pension giant to seek a broader national membership base.

Australian Retirement Trust chief executive Bernard Reilly said the combined fund would be able to leverage its size and scale to seek high value investments and lower fees.

Mr Reilly said that from July 1 the fixed weekly administration fee for super savings account members would be cut from $1.50 to $1.20, and from 0.16 per cent to 0.15 per cent per annum for QSuper account members.

“We’re open to and inclusive of all Australians, no matter where they live or what industry they work in, and as a super fund that works for members, not shareholders, our members can trust that we’ll always work in their best interests,” said Mr Reilly.

“Over the next two years, we will also continue to fully integrate the two funds, including our investment portfolios and technology platforms.”

Australian Retirement Trust chief executive Bernard Reilly.

The fund, which will remain headquartered in Brisbane, launched its new name last year reflecting a move to a more nationally-focused organisation and ambitions to double in size by the end of the decade.

“Our heritage is Brisbane,” said Mr Reilly, who was previously boss of Sunsuper. “But the growth opportunities are outside of Queensland, with a quarter of the combined fund’s membership currently residing interstate.”

“From day one, we will have funds under management of $230bn and by the end of the decade aim to have $500bn.“

Queensland’s two biggest super funds announced plans to merge in 2019 to take on southern state industry giants such as AustralianSuper and retail funds run by the big banks.

Regulators are calling on more super funds to merge to reduce complexity in the super system and cut costs. In 2019, VicSuper and First State Super – funds focused on state government employees in Victoria and NSW respectively – announced plans for a merger while in Queensland LGIA Super and Energy Super have merged in recent months.

Mr Reilly said that the merger between QSuper and Sunsuper was a “marriage rather than a takeover” with both funds sharing the same culture.

Founded in 1912 to manage the retirement nest eggs of public servants, QSuper had more than 620,000 members with over $133bn in funds under administration.

Sunsuper began in 1987 and manages $96bn for its 1.4 million members. QSuper, which lost the monopoly to operate the state’s public service pension fund in 2017, has in recent years faced competition from Sunsuper.