The Australia Post Superannuation Scheme (APSS) has signed a non-binding heads of agreement to explore a merger with Sunsuper.
The $8 billion APSS has been closed to new Australia Post employees since 2012 and has around 30,000 members.
APSS Trustee's independent chair Mark Birrell said the decision to explore a merger is to empower its members with more choice and services.
"The merger will only proceed to completion if a comprehensive due diligence review confirms that it's in the best interests of our members. Members' super benefits will be protected," Birrell said.
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The merged fund will provide Australia Post with a corporate plan within its structure and maintain APSS's defined benefits scheme funded by Australia Post.
APSS members' accumulation balances are to be transferred to a similar investment product within the merged fund.
Last week Sunsuper and QSuper confirmed that they will merge by September after first exploring the merger in 2019.
The merged fund will create one of Australia's largest superannuation funds with around $200 billion in assets. If the merger with APSS goes ahead, it will surpass AustralianSuper's $203 billion and come out as the largest superannuation fund in Australia with $208 billion.
Currently, Sunsuper has some $80.6 billion in assets under management and 1.4 million members, while QSuper has about $120 billion and 600,000 members.
Sunsuper chair Andrew Fraser said APSS members would benefit from a wide range of investment options, in-house administration and low fees.
"The APSS looks to join us at an exciting time for our fund. It demonstrates our commitment to offering a high-quality solution to employers of the size and national reach of Australia Post, a focus that will continue in a Sunsuper and QSuper merged fund," Fraser said.
The APSS noted that Australia Post Group has other default superannuation arrangements in place which will be unaffected by the merger discussions.
The latest development follows Sunsuper's merger with CBH Super, AustSafe Super, Kinetic Super and the IAG & NRMA Superannuation Plan.