News
www.fssuper.com.au Volume 13 Issue 02 | 2021
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Suncorp sells superannuation assets to LGIAsuper Karren Vergara
S Mercer takes over TAL fund Elizabeth McArthur
TAL Superannuation and Insurance Fund members were transferred to a new fund under a successor fund transfer. On 31 May 2021, all members of the $1.3 billion TAL Superannuation and Insurance Fund were slated to be transferred to Mercer Super Trust by way of a successor fund transfer. TAL Life will remain the insurer but Mercer will become administrator. In November 2020, TAL moved most Accelerated Protection customers with their insurance through the fund to TAL Super by way of a successor fund transfer. Now, those customers will be with Mercer. The trustee for the fund recently reviewed the super and insurance arrangements it offers, determining that it is in the interests of members to transfer their benefits to the Mercer Super Trust. There will be no impact to insurance premiums. However, fees are likely to reduce for most members. For example, the admin fee in the Australian Shares option will reduce from 1.20% to 0.39% p.a. Mercer was recently the beneficiary of another successor fund transfer when the Factory Mutual Insurance Company Super defined benefit fund moved members to Mercer Super Trust. It had $77 million in funds under management. fs
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The quote
The values and purpose of LGIAsuper, which is also headquartered in Queensland, align closely with those of Suncorp.
uncorp will divest its wealth division to the industry fund, transferring $6.4 billion in assets under management and 137,000 members. LGIAsuper will pay $45 million for the acquisition for Suncorp Portfolio Services and will retain about 130 staff that work within the wealth business. LGIAsuper will have $28 billion in assets and 250,000 members after its Energy Super merger and Suncorp acquisition are completed. "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," LGIASuper chief executive Kate 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."
The merged entity promises that all members will see fees reduce. Suncorp banking and wealth chief executive Clive van Horen said: "After extensive engagement with a number of potential acquirers, we believe that LGIAsuper is best placed to deliver sustainable member outcomes. "The values and purpose of LGIAsuper, which is also headquartered in Queensland, align closely with those of Suncorp. This transaction will also enable the combined business to take advantage of size and scale benefits." Suncorp began scouting for potential buyers in February 2020. Suncorp Portfolio Services landed in hot water at the banking Royal Commission for withholding tax benefits from members, not being transparent about intra-company payments and dragging its feet in transitioning members to MySuper. Its lifestage funds copped red ratings in APRA's 2020 heatmap for charging 1.68%p.a. in administration fees. fs
Raiz acquires superannuation platform Kanika Sood
ASX-listed Raiz paid $9.5 million to acquire a firm with a $70 million choice superannuation fund. Raiz bought Superestate, whose business includes superannuation, a residential property fund, and a property data platform. Under the deal, its founder Grant Brits and Superestate’s staff will join Raiz. It was expected to close in late May subject to conditions including Raiz completing due diligence, continuation of material contracts and Superestate being debt free. Raiz chief executive George Lucas said the acquisition added scale, residential property to its asset mix in superannuation and outside it, and operational and growth synergies. “This acquisition, the first in our five-year history, marks an important milestone for the group by demonstrating organic growth is not our only option to increase funds under management (FUM) and active customers. Other acquisitions are on our
radar as we actively look for opportunities in Asia Pacific region,” Lucas said. Raiz said the two businesses will continue to operate separately until an integration strategy that is the best outcome for all customers is implemented. Raiz’s pre-acquisition superannuation assets sat at $92.5 million at March end, growing 14.6% in the quarter. In the March quarter, it also rolled out portfolios for the self-managed superannuation fund sector which has $730 billion in assets. Superestate’s superannuation fund is a choice product and a sub-plan of Tidswell Master Superannuation Plan. It had about $80 million in assets at FY20, up from $22 million the year before. It offers three superannuation multi-asset portfolios. Of the $80 million in assets, about 73% was outsourced to Macquarie Investment Management while about 26% was invested in Superestate residential property fund as at June 2020. fs
THE JOURNAL OF SUPERANNUATION MANAGEMENT•
