The deal continues Suncorp’s simplification strategy and also adds to LGIASuper’s growth after its recently announced merger with Energy Super. When combined with Suncorp Wealth, the combined business would have about $28 billion in funds under management and about 250,000 members.

It adds to the push for scale in the superannuation sector. QSuper and Sunsuper are also in the middle of a merger which will make the combined business one of Australia’s biggest.

After the deal, Suncorp would have about $14 million in stranded costs which are recurring expenses it would be required to pay. It said this would be offset by transitional services fees and would be removed from the cost base by 2023.

Suncorp chief executive Steve Johnston said the deal was a good outcome for 137,000 superannuation members and for the company which he said was focussing on banking and insurance.

Among super funds, the Suncorp business was small with about $6.4 billion in funds under management.

Under the deal, LGIASuper would continue to distribute Suncorp superannuation products to Suncorp customers  for 18 months and the 130 staff would be offered roles by the new ownership.