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Update on LGIAsuper and Energy Super merger plans

Published 1 July 2021

LGIAsuper and Energy Super completed their merger today (1 July 2021).

The merger has created a strong Queensland-based superannuation fund of around $22 billion, managed on behalf of approximately 120,000 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. It should also give us access to a wider range of investment opportunities.

The merger has created a single fund, which is now managed by the LGIAsuper Trustee. The Energy Super and LGIAsuper brands will continue to operate for the time being, with contact centres, workplace visits, access to advice and great personal service remaining the same.

Video: CEO Kate Farrar talks about the opportunities ahead for our newly merged fund

Expected benefits for members

We expect that the merger will create the following potential benefits for members:

  • Increased range of investment opportunities.
  • Strong and sustainable long-term returns.
  • Lower investment and administration fees.
  • Access to enhanced products and services.
  • Greater access and presence in regional areas.

Our merger will also strengthen our internal teams and service delivery model to provide increased support, education and advice.

Combined leadership

A new LGIAsuper Board and Executive team have been created to run the newly merged fund and are now in place. These teams consist of a mix of both LGIAsuper and Energy Super personnel.

Kate Farrar, LGIAsuper's Chief Executive Officer, was appointed by the Boards of both funds to continue as CEO and lead the newly merged fund from 1 July 2021.

Merging similar values and strengths

The merger has brought two very similar and like-minded funds together to provide more benefits for members.

Both LGIAsuper and Energy Super have a long and successful history as profit-for-members funds, with a strong member-focus, and a commitment to the local government, energy, and electrical industries. Both funds are open funds, welcoming members from many different industries and sectors.

LGIAsuper will continue as a medium-sized boutique fund with a strong member focus. Increasing our size and scale can help us deliver more benefits to members, while still providing a personalised service.

Further information

If you would like more information about the merger, please refer to our frequently asked questions.

We’re here to help. If you have any questions about the merger or would like to discuss your superannuation, please call us on 1800 444 396.

 

* Combined figures from both funds, as of 30 June 2021.

Frequently asked questions

  • Why a merger?
    • Over the past two years, LGIAsuper has been progressively working to improve our fund and ensure its long-term sustainability and performance for members.
    • In October 2020, LGIAsuper entered into an exclusive agreement to explore a merger opportunity with another Queensland-based fund, Energy Super.
    • Having determined that this merger is in the best interests of our members, we are focused on implementing the merger on 1 July, 2021, and then delivering the benefits over the subsequent year.

  • Who is Energy Super?
    • Energy Super is a strong profit-for-member superannuation fund with almost 50,000 members and $8 billion in funds under management.
    • As a proud industry super fund with a 40-year heritage, Energy Super has always been a fund of choice for the energy industry. Like us, they are now an open fund and pride themselves on individualised service.
    • Energy Super has been rated as a value-for-money fund with independent ratings agency SuperRatings for more than a decade.

  • Will there be any changes to my membership?
    • Everything will stay the same for the foreseeable future and any changes will be communicated with members as this process proceeds in 2021.

  • Is this because of market volatility as a result of COVID-19?
    • No, this is an opportunity that has arisen because our funds have similar priorities and are keen to explore the benefits of partnering as a combined fund.

  • What role does social responsibility play in Energy Super's investment philosophy?
    • Energy Super considers environmental, social and governance (ESG) risks, impacts and opportunities in its investment decision-making to protect and manage members’ investments for the long term. All of Energy Super’s investment managers are signatories to the internationally recognised Principles for Responsible Investment, which demonstrates the fund’s commitment to socially responsible investment.
    • Energy Super adopts a practical and balanced approach to ESG management and, like any super fund, Energy Super’s investments are never dominated by any particular industry.
    • It invests in sharemarkets across the world and it has investments in a range of clean-energy technologies in addition to traditional coal mining, oil, and gas companies. Energy Super is also proud to be an investor in renewable energy generators and recognises the importance of being part of such an important social transition.
    • Energy Super is reluctant to exclude particular investments as this limits the investable universe and has the potential to create inefficient portfolios. Its investment process is transparent. In 2014, Energy Super was the first fund to give members a clear view of where their money was being invested and its investments can be viewed on its website.
    • Energy Super has a specific socially responsible investment option – the SRI Balanced option – which is an externally managed, multi-manager, balanced fund. This fund explicitly considers the impacts of ESG issues, identifying leaders within industries in their responsible approach to ESG issues. This fund excludes investments in areas that have a high negative social impact.

  • What is Energy Super's involvement with fossil fuels?
    • Many of Energy Super's members work in the energy sector, in both traditional and renewable energy production. With the renewable sector expanding, we can expect more members will be involved in clean energy production in the future.
    • Some of Energy Super’s largest employers are already heavily involved in renewable energy, such as CleanCo, Energy Queensland and Powerlink.
    • As a public fund, Energy Super’s members and employers also come from a wide range of other sectors, industries and communities.

  • What do LGIAsuper and Energy Super have in common?
    • As profit-for-member funds, we are required to act in the best interests of members. Both funds are viewed as highly successful in their own right and we share common heritages.
    • We both started servicing members from a specific sector and have now broadened to serve members from many industries.
    • Both funds also have a strong track-record of and commitment to delivering strong and sustainable returns to members.
    • We are both Queensland based funds with a focus on understanding our members and share a common vision to remain personal and boutique.

  • What kind of benefits could a merger provide?
    • When the merger is implemented, you will be part of a strong, $20 billion fund with approximately 120,000 members.
    • The due diligence process, with the assistance of external advisers, concluded that the benefits include:
      • Better mid-market investment opportunities, particularly in Queensland
      • Lower administration and investment costs and fees
      • Opportunities to improve products and services
      • Opportunities for organic growth as a result of the strength of both funds’ industries and heritage.
    • We would still be a boutique and personal Queensland based fund with greater size and scale to serve our members, reduce costs and maximise returns without sacrificing what makes us different.

  • What will a merger mean for me?
    • If the merger proceeds as planned, you would be part of a strong, $20 billion fund with approximately 120,000 members, with the potential benefits listed above.
    • The merger will not proceed unless LGIAsuper, Energy Super, and the regulatory authorities determine that this is in members’ best interests.

  • What is the process?
    • The two funds are working together to deliver a merger on 1 July, 2021, with a focus on creating a great organisation and a single MySuper product in time for the merger date.
    • We will also develop operational and implementation plans and share information to identify how to deliver the best outcomes for our members by realising the full synergies over the subsequent year.

  • Will members be asked to vote on the merger?
    • No, this is not required. The obligation is for the Board to determine that this merger is in members’ best interests, and this step is now complete.

  • How can I find out more?
    • To find out more, check back here for the latest news or or contact us on 1800 444 396.
    • We will keep you informed of any decisions that may be important to you as a result of these discussions.