Pennisi to exit QSuper in $200bn mega-merger
QSuper boss Michael Pennisi will leave Queensland's biggest pension fund following its $200bn merger with Sunsuper but thousands of staff have been guaranteed their jobs.
Sunsuper chief executive Bernard Reilly will be chief executive of the combined fund after the merger that is expected to be completed by September.
The funds said Monday that the merger had now progressed to the "heads of agreement" stage with a guarantee that the funds' combined 2350 staff members below senior management level will be employed for at least two years.
Queensland's two biggest super funds announced plans to merge in 2019 to create the country's largest pension fund managing $200bn in retirement savings for almost two million people. The pension fund goliath will be able to take on southern state industry giants such as AustralianSuper and retail funds run by the big banks.
A board of 13 directors drawn from the existing boards of QSuper and Sunsuper will oversee the merged fund.. Don Luke, the current chair of QSuper, will be chairman.
Industry watchers say the merger will give Queensland workers the financial power to invest in more high-quality assets around the globe and comes amid rising competition in the super sector that has seen a wave of mergers.
There has been growing dissatisfaction with the performance of retail superannuation funds following the Royal Commission into the banking and financial Services industry.
Founded in 1912 to manage the retirement nest eggs of public servants, QSuper now has 600,000 members with over $120bn in funds under administration. Sunsuper began in 1987 and manages $80bn for its 1.4 million members.
Mr Pennisi told the QSuper board in 2019 that he planned to leave the fund at the end of his contract in October 2020, but had extended his tenure to oversee the merger. Mr Pennisi, a former executive at the Queensland Investment Corporation (QIC), has been credited with moving QSuper from an organisation only serving public servants to an open fund.
Mr Reilly, a former executive at State Street Advisors, has been chief executive of Sunsuper since 2019. Mr Reilly said he had committed to head the merged fund until at least December 2022 and spend most of his time in Brisbane where the merged fund will be headquartered. The combined fund does not yet have a name.
"It is a great honor to be chosen to lead the integration of two successful superannuation funds into what will become a world-class business based in Brisbane," said Mr Reilly.
QSuper, which lost the monopoly to operate the state's public service pension fund in 2017, has in recent years faced competition from Sunsuper. Both funds have cut fees and ramped up their marketing efforts as they attempted to keep their members.
QSuper and Sunsuper, which are both "profit for member" funds, are among the best performers in the country, picking up a swag of industry awards in recent years.
The merger comes as the industry watchdog, the Australian Prudential Regulation Authority, has called on more super funds to merge to reduce complexity in the super system.
VicSuper and First State Super - funds focused on state government employees in Victoria and NSW respectively - announced plans in 2019 for a merger that would create a $110 billion fund. Brisbane-based Club Super is merging with larger rival Hostplus.
Originally published as Pennisi to exit QSuper in $200bn mega-merger