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Energy Super, LGIAsuper explain merger reasoning

 — 1 minute read

The two industry superannuation funds have outlined their reasons for potentially merging, including pressure to slash fees in the current environment.

LGIAsuper has listed reasons for why it is contemplating a merger with Energy Super, which if it proceeds, will be completed in July. 

The amalgamation would result in a $22 billion fund with around 120,000 members, which would be the second-largest fund based in Queensland. 

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Energy Super is the smaller of the two funds, with 48,000 members and overlooking around $8 billion in retirement savings. Meanwhile, LGIAsuper is a fund for local government employees, managing more than $13 billion. 

“Across the superannuation industry, we are continuing to see ongoing merger activity driven by the need to drive costs lower for members whilst still maintaining exceptional levels of service,” LGIAsuper stated, in newly published answers to frequently asked questions. 

The funds have signed a heads of agreement, which provides in-principle support for the merger to proceed. Currently, they are working on establishing a joint organisation and a single MySuper product, to take effect from 1 July.

The benefits for members identified through the due diligence process include increased range of investment, more sustainable long-term returns, lower investment and administration fees, access to enhanced products and services, and a greater presence in regional areas. 

Both funds market themselves as boutique, “face-to-face” service for their Queensland members. 

“Both of our funds have seen the great benefits that a boutique fund with more size and scale can deliver to our members, whilst still maintaining this great service we both offer,” LGIAsuper said.

The pair have confirmed Kate Farrar, the current chief executive of LGIAsuper, will lead the merged fund.

 

Energy Super, LGIAsuper explain merger reasoning
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Sarah Simpkins

Sarah Simpkins

Sarah Simpkins is a journalist at Momentum Media, reporting primarily on banking, financial services and wealth. 

Prior to joining the team in 2018, Sarah worked in trade media and produced stories for a current affairs program on community radio. 

You can contact her on [email protected].

 

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