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QSuper merger update, fee cuts

QSuper has assured members they will shortly feel the benefits of scale in the form of fee cuts, after it merges with Sunsuper to create Australian Retirement Trust.

The $133 billion QSuper will merge with $90 billion Sunsuper on February 28.

The QSuper brand will continue as part of Australian Retirement Trust for existing QSuper members, future employees of the Queensland government and default members as well as spouses and children of QSuper members who join the fund.

"Following our merger with Sunsuper, we expect to have the size and scale to ensure that our administration fees remain among the lowest in the industry," the fund said in a significant event notice to members.

As such, QSuper and Sunsuper have agreed to cut admin fees from July 1.

QSuper accumulation account, income account and lifetime pension pool admin fees will be reduced from 0.16% to 0.15% per annum.

The administration fee cap will also be reduced from $900 to $875 per annum on July 1.

QSuper informed members that the merger will result in an increase to  investment costs.

As the fund moves assets and integrates its investment teams with Sunsuper, investment transaction costs will be incurred.

These will be reflected in the unit price for some investment options, in the same way that investment transaction costs would normally be factored into the calculation of the daily unit price of some of the investment options in the QSuper accumulation and income accounts.

"This means that over the next two to three years, the investment transaction costs of the merger will reduce the unit prices by up to 0.05%, depending on the investment option," QSuper explained.

"The QSuper board expects that, within approximately 18 months, the investment benefits for members is expected to outweigh the short-term investment transaction costs of the merger."

Read more: QSuperSunsuperAustralian Retirement Trust