NGS Super has agreed to merge with Uniting Church Superannuation Plan (UCSuper), after having just finalised its merger with Cue Super last month.

NGS and UCSuper have signed a memorandum of understanding, and the transaction would bring NGS Super to $4.4 billion in assets under management and 102,000 members, adding $320 million and 12,000 members from UCSuper.

"NGS Super's heritage as a fund for non-government schools means many of our members work in faith-based schools. Similarly, UCSuper's membership base consists of Uniting Church employees, so there's a natural affinity between the funds and a strong focus on values," NGS Super chief executive Anthony Rodwell-Ball said.

There are currently about 40 Uniting Church sponsored schools in Australia and Rodwell-Ball estimated NGS Super has members in two-thirds of these schools.

"On a practical level, the increased scale and efficiency that the merger delivers means UCSuper members can benefit from low costs, competitive returns and industry-leading insurance and financial advice," he said.

The merger process is expected to be finalised by March 2012.

NGS Super only finalised its merger with CueSuper on 1 April this year.

"We aren't shy about the fact that NGS Super is focused on managed and appropriate growth, and consolidation with other like-minded funds is a key part of that," Rodwell-Ball said.

But he said NGS Super would never become a large fund.

"The board has the view that $6 billion and 120,000 members would be a good size to retain. In a fund with a couple of 100,000 of members it is hard to get retail engagement - to get loyalty and good relationships with members," he said.

UCSuper was one of seven faith-based funds to establish a new association, the Christian Superannuation Funds Association, earlier this year to respond to the increased pressures of ongoing consolidation in the industry.

But the announced merger will result in the fund pulling out of the organisation.

"We will probably be severing ties at some point, because we will no longer be a stand-alone fund," UC Super general manager Neil Kent said yesterday.

Kent also said NGS Super was likely to retain UC Super's seven-member staff.

"NGS wants our physical presence up here [in Brisbane]," he said.