137,000 Aussies forced to change super funds: Is this you?

(Source: Getty) (marchmeena29 via Getty Images)

Suncorp will sell its superannuation business to Local Government Investments Australia super (LGIAsuper) in a move that will see the transfer of more than 137,000 members.

The $45 million deal will see all Suncorp members, as well as $6.4 billion in funds under management, transferred to LGIAsuper.

Suncorp super members can expect to be fully transitioned by the first half of next year.

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LGIAsuper also recently made another acquisition of Energy Super that is set to be finalised in July this year.

Once LGIAsuper completes both mergers, the total fund size will grow to around $28 billion and have a membership of around 250,000.

LGIAsuper CEO Kate Farrar said Suncorp made the decision to sell the super business after undergoing extensive due diligence, regulatory consultation and analysis of the benefits a merger could bring to members.

“This acquisition, combined with the Energy Super merger, will achieve an ideal, sustainable fund size, while maintaining our status as a boutique and personal superannuation provider,” Farrar said.

“With the superannuation industry consolidating rapidly, we want to see our Queensland-based funds thrive in an increasingly complex and competitive national market, and the best way to do that is together.”

Suncorp Bank CEO Clive van Horren said after engagement with a number of potential buyers it believed that LGIAsuper would be best placed to deliver sustainable member outcomes.

“The values and purpose of LGIAsuper align closely with those of Suncorp and this transaction will enable the combined organisation to take advantage of scale benefits in the future,” he said.

Farrar said Suncorp super members will not see any short-term changes but in the medium term will be brought into the LGIAsuper business.

There have been an increasing number of acquisitions between superannuation funds recently as regulators put pressure on underperforming funds to merge with larger funds to achieve the necessary scale to provide the best outcome for members.

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