Brisbane-based superannuation funds QSuper and Sunsuper will merge by September to create a A$200 billion ($153.6 billion) giant serving about 2 million participants.
Don Luke, chairman of the A$120 billion QSuper, and Bernard Reilly, CEO of the A$80 billion Sunsuper, will become chairman and CEO, respectively, of the merged entity, a joint news release said Monday.
A separate QSuper news release said QSuper CEO Michael Pennisi — who had agreed to stay on beyond the October 2020 end of his contract amid the ongoing merger discussions — will step down in September.
Further details on the merged organization's structure will be revealed over the coming months, the joint news release said.
Differences in the organizations' external manager lineups could pose challenges for merging the two super funds. For example, for the fiscal year ended June 30, QSuper listed only three equity managers while Sunsuper had close to 20.
The combination of QSuper and Sunsuper will be the latest milestone on an accelerating path of industry consolidation in Australia, supported in recent years by a regulatory tailwind favoring economies of scale that can lower fees for participants.
The agreement paves the way for the creation of a fund "with the scale to deliver outstanding service, greater efficiencies and lower costs for members," Mr. Luke and Sunsuper Chairman Andrew Fraser said in the joint news release. Mr. Fraser will remain a board member for the combined entity.
The merged entity's A$200 billion and 2 million participants will leave it just behind Melbourne-based AustralianSuper's A$210 billion and 2.3 million participants.
Aware Super, a Sydney-based fund which has completed two mergers of its own over the past 12 months, will stand third in the country's revamped superannuation fund lineup with A$140 billion.