LGIAsuper completes acquisition of Suncorp superannuation business

1 April 2022

LGIAsuper has today (1 April 2022) officially expanded its horizons, completing a first-of-its-kind acquisition of Suncorp Portfolio Services Limited (SPSL).

The transaction has seen Queensland based profit-for-members fund LGIAsuper, acquire national retail fund Suncorp Portfolio Services Limited (SPSL), to deliver medium-term fee benefits to members. We have also further strengthened our position as a Queensland-based superannuation fund that now manages around $31 billion on behalf of approximately 250,000 members.

Over time, we expect that our increased size and scale will enable us to deliver better services and lower costs for all our members. The acquisition has brought together like-minded funds to provide more benefits for members and created Australia’s first three-party superannuation merger.

Fund CEO Kate Farrar, who led the merger and acquisition, said completing the transaction enables the Queensland-based fund to deliver medium-term fee benefits and thrive in an increasingly complex and competitive national market.

“The acquisition of SPSL business gives us the combined size and scale to deliver efficiently for all our members, while maintaining a personal and boutique member experience that sets us apart against the growing number of superannuation mega-funds,” Ms Farrar said.

“This transaction is unique in that we are a profit-for-members fund acquiring a retail fund, with the ultimate intent being to mutualise the retail fund.

“The superannuation industry is consolidating rapidly, with merger and acquisition activity driven by a need to lower costs and improve service offerings to remain competitive and ensure we are acting in the best interests of all members.

“We have a clear vision for our future together: to achieve a sustainable fund size that maintains our status as a boutique and personal superannuation provider,” she said.

Suncorp Wealth division’s Executive General Manager James Gyton said his appointment to the fund’s leadership team would assist with the integration.

“This is an exceptional opportunity for us to bring together the experience and knowledge of people from not only two teams but two fund types to enable us to deliver a unique offering that provides members with the best possible outcomes,” Mr Gyton said.

Mr Gyton will join the fund’s executive board as the Chief Operating Officer for the SPSL business.

Ms Farrar said Suncorp’s superannuation members would not see any short-term changes to their fund, with LGIAsuper and Energy Super initially offering the Suncorp fund as a standalone entity under the Suncorp brand.

Ms Farrar said the investment, which was funded from LGIAsuper’s reserves, had a superb payback period which was well below equity market price / earnings ratios.

Frequently asked questions

Who is LGIAsuper and Energy Super?

LGIAsuper is a Queensland-based superannuation fund that has provided trusted and reliable investments, advice, and insurance solutions for more than 56 years. Energy Super has a legacy as a strong, profit-for-members superannuation fund that took pride in being the Industry Super Fund for people in the energy industry. The two funds merged in 2021 to form a strong, Queensland-based superannuation fund of around $24 billion, managed on behalf of approximately 123,000 members (as of 30 June 2021).

What does 'LGIAsuper' stand for?

The LGIA in LGIAsuper stands for Local Government Investments Australia. It acknowledges the fund’s proud heritage as the default super fund for Queensland local government, and our ongoing commitment to investing in communities where our members live and work.

What is a profit-for-members fund?

Since 1965, LGIAsuper has been a profit-for-members fund, meaning we are owned by members and all profits are returned to members, rather than shareholders. Suncorp’s superannuation members will soon be able to enjoy the benefits of being part of our member-focused fund.

How has LGIAsuper performed in the past?

Over the past 36 years, LGIAsuper has consistently delivered an average return of 9.0% (as at 30 June 2021) to members. As part of our efforts to maximise profits for members, we also reduced administration costs significantly. In 2022, we achieved a Platinum rating for our Accumulation and Pension products from independent rating agency SuperRatings for the 14th year running. LGIAsuper was also acknowledged by research company Chant West, which awarded the fund a ‘5 Apples’ rating (the highest possible) for both our Accumulation and Pension accounts.

Why did Suncorp choose LGIAsuper and Energy Super for this acquisition?

Like LGIAsuper and Energy Super, Suncorp is a Queensland-based institution with a national vision. By taking the fund and merging it into our profit-for-members fund, we can achieve better service and products, at a lower cost, for all members. In doing so, customers become part of a profit-for-members fund, with all the advantages and benefits that brings.

Will my superannuation account or products change?

Nothing is changing for Suncorp superannuation members at this time. As part of the agreement with LGIAsuper, Suncorp will continue to distribute superannuation products to Suncorp customers for a transition period of 18 months following the completion of the sale. 

Will this impact my insurance?

Suncorp superannuation members’ investments and insurance will not be changing at this time.

Will my superannuation fund still be called 'Suncorp'?

Yes. As part of the agreement between Suncorp and LGIAsuper and Energy Super, this brand will not change during our transition period.

When can I expect to see new services or benefits?

With the sale now complete, we will begin an 18-month transition. We will keep members updated when anything changes, or new products or services become available.

 

< More information in previous news and frequently asked questions