Sunsuper is set to merge with a $2.5 billion industry fund in early 2019.
In a joint statement, Sunsuper and AustSafe Super have signed a Successor Fund Transfer Deed.
Both established 30 years ago, AustSafe is the super fund for rural and regional Australia with more than 100,000 members. Sunsuper is the fastest growing fund in Australia with about 1.3 million members and $55 billion in funds under management.
As such, the merger will create one of the largest superannuation funds in Australia, with $58 billion in assets and about 1.4 million members across 130,000 employers.
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According to Rainmaker data, AustSafe ranked second in the Selecting Super MySuper default performance return tables for the year ending May 2018.
Sunsuper chair Andrew Fraser said the merger was a good fit for both funds, given their similarities.
"Like AustSafe Super, Sunsuper has a long heritage of supporting rural and regional areas with around 380,000 of the fund's members and 40,000 employers currently living and working within these communities," Fraser said.
"The fund also directly invests, on behalf of members, in assets such as infrastructure and utilities in regional areas and this merger will facilitate further investment in these communities through potential office expansions and support in local and community-based programs."
Sunsuper's earlier merger with Melbourne-based Kinetic Super was finalised in March of this year, and Fraser said this additional partnership represents a further opportunity to set the gold standard for the industry in terms of best practice for super fund mergers.
AustSafe Super's independent chair Henry Smerdon echoed Fraser's sentiments.
"This is a particularly well-suited match and good cultural fit for both organisations. Both funds started in Queensland within a year of each other, are based on a profit-for-member model, provide industry-leading services and have a passion for rural and regional Australia," Smerdon said.
He added that the decision to merge was not one that was taken lightly.
"We think it will result in a tremendous outcome for both AustSafe Super and Sunsuper employers and members. The coming together of these two organisations will provide members with a fund that has a strong competitive position in the market and one that values them. It will help to deliver both the best possible member experience and provide financial security in their retirement."
Currently AustSafe has a group insurance arrangement with CommInsure, which is set to be acquired by AIA - Sunsuper's group insurer.