Queensland super funds QSuper and Sunsuper set to merge

QSuper and Sunsuper are on the verge of announcing a merger that would create one of Australia’s largest superannuation funds with close to $200bn in assets and membership of two million.

Queensland Treasurer and Investment Minister Cameron Dick said the government had worked to protect the interests of fund members through the merger process. Picture: NCA NewsWire / Jono Searle

QSuper and Sunsuper are on the verge of announcing a merger that would create one of Australia’s largest superannuation funds, with close to $200bn in assets and a combined membership of two million.

Senior Queensland government sources said the amalgamation was expected to be announced this week. The two Queensland-based super funds began moves to merge in late 2019 and signed a memorandum of understanding in March last year before entering into diligence discussions.

QSuper has about $120bn in assets while Sunsuper has about $75bn. Together, they would rival AustralianSuper, which has an estimated $200bn in assets and 2.4 million members.

QSuper is the Queensland Government’s default superannuation fund and its public servants represent a significant number of its members. Among the conditions set by the Palaszczuk government for the merger was for both funds to remain based in Queensland and for the chief executive officer to be based there as well.

The merged fund will also be required to continue to use the Queensland Investment Corporation as fund manager.

Queensland Treasurer and Investment Minister Cameron Dick said the government had worked to protect the interests of fund members through the merger process.

“The Palaszczuk government supports this proposal because it aligns with our vision to reinforce Queensland’s position as a preferred investment destination,” Mr Dick said.

“The merger of QSuper and Sunsuper would create Australia’s second largest super fund, headquartered in Queensland with two million members and $200bn in assets.

“Should the merger go ahead, it will further reinforce Queensland’s position as a financial business hub,” Mr Dick said.

“As we continue our path to economic recovery from COVID-19, it would also boost economic activity and should boost member benefits through investment synergies.”

Mr Dick said the Palaszczuk government had previously indicated its support for the proposed merger was contingent on the funds being able to demonstrate benefits to members, satisfying stakeholders, community service activities and maintaining protected defined benefits and associated liabilities.

The merged fund would also be required to maintain Government Superannuation Officer services and feature appropriate government representation.

Both funds have been top performers, with researcher SuperRatings awarding Fund of the Year Award to QSuper in October. Sunsuper won the same award the year before.

The amalgamation would be the latest and biggest in a series of mergers between super funds in recent years.

It is expected the new entity would focus on widening its membership outside of Queensland.

Sunsuper chairman Andrew Fraser was Treasurer in the Bligh Labor government from 2007 until 2012. QSuper chairman Don Luke said: “Our sole focus in making this (merger) decision will be based only on what is best for our members.”