LGIAsuper and Energy Super enter merger discussions to explore benefits to members

• Everything will stay the same for the foreseeable future, we will keep you informed of any decisions that may be important to you as a result of these discussions.  

• Over the past two years, LGIAsuper has been progressively working to improve our fund and ensure its long-term sustainability and performance for members.
• The next step in this process is to explore the benefits and savings that greater size and scale can bring to members.
• This process is in line with guidance provided by the regulator to ensure the best possible outcomes and efficiencies for members. 

• No, this is an opportunity that has arisen because our funds have similar priorities and are keen to explore whether it would be beneficial to partner as a combined fund.

• Energy Super is a strong profit-to-member superannuation Fund with almost 50,000 members and $7 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.
• It has a long history of serving employees working in the electricity industry in Queensland. Up until a few years ago, most of Queensland’s electricity companies were government-owned and Energy Super’s members therefore share a lot of characteristics with LGIAsuper’s members in the local government sector.
• Energy Super is the default fund for the employees of government-owned Energy Queensland, which includes the businesses of Ergon Energy, Energex and Yurika. As profit-for-member funds, both LGIAsuper and Energy Super’s focus is to act in the best interests of members.
• Similar to LGIAsuper, Energy Super invests in wide range of asset classes including shares, property, infrastructure and resources and has a track-record of delivering strong and sustainable returns to members. Energy Super is also proud to be an investor in renewable energy generators. The fund recognises the importance of being part of such an important social transition.

• 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.

• 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.

• Our preliminary exploration has been positive and indicated the two funds have a lot in common.
• As profit-for-member funds, our motivation is 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 funds with a focus on understanding our members and share a common vision to remain personal and boutique.

The due diligence process we have agreed to undertake will investigate whether the merger could deliver:

• Better investment opportunities 
• Lower fees
• Opportunities to improve products and services
• More opportunities to invest in and support communities Queensland-wide.
  
  

If we did merge, we would still be a boutique and personal fund, based in Queensland, but with greater size and scale to serve our members, reduce your costs and maximise returns without sacrificing what makes us different. 

• If the merger proceeded, you would be part of a strong, $20 billion fund with approximately 123,000 members.
• This would potentially give you access to the benefits (see above).
• The merger will not proceed unless LGIAsuper, Energy Super, and the regulatory authorities determine that this is in members’ best interests. 

• We have now signed a Memorandum of Understanding, or MoU, with Energy Super to enter a period of exclusive due diligence to explore a merger. 
• That means the two funds will work closely together and share information to fully understand each business and identify what benefits a merger would deliver for our members. 
• The review of each fund’s operations will consider the best way to combine and leverage their greater size to deliver the best outcomes for our members.

• There is a considerable amount of work involved in the due diligence process before we can move to a formal agreement. 
• We are targeting to reach a formal agreement by the end of 2020 but combining the funds would take longer to achieve and would not likely happen until the second half of 2021.
• We will keep you updated as this process proceeds.

• To find out more, visit the LGIAsuper website or contact us on 1800 444 396.