The concerns of one of Australia's leading actuaries regarding the transfer from the state of about $330 million in assets may have stopped the mutualisation of $9 billion fund manager GESB, which claims about one quarter of Western Australia's workforce
The concerns of one of Australia's leading actuaries regarding the transfer from the state of about $330 million in assets may have stopped the mutualisation of $9 billion fund manager GESB, which claims about one quarter of Western Australia's workforce as members.
A personal presentation from PricewaterhouseCoopers partner Catherine Nance to the state's under-treasurer, Tim Marney, is understood to have set in motion a chain of events that ultimately led to Treasurer Eric Ripper stopping the transition at the 11th hour.
It was planned that most funds from the former Government Employees Superannuation Board would be handed over to 280,000 members on July 1.
On June 30, however, Mr Ripper stopped the transition process, which was budgeted to cost at least $13 million.
The surplus funds in contention relate mainly to the 21,000-member Gold State Super pension fund, which is a defined benefit scheme.
As an actuarial adviser to Treasury, Ms Nance is understood to have written a report on the transition which showed surplus funds sought to be transferred across to the corporatised GESB, about $358 million, were about 12 times more than the amount she recommended, about $30 million.
It is understood that Ms Nance made the personal presentation to Mr Marney after the report was given to Treasury, though it is not known whether there was a significant time gap between these two events or who prompted the presentation.
Ms Nance declined to comment on her role. Meanwhile, the state government has refused to answer questions in any meaningful way since July 1 when it confirmed that concerns about the surplus were one of several obstacles to the long-planned transition.
The PricewaterhouseCoopers actuary is one of the profession's best-known practitioners, active in The Institute of Actuaries of Australia. She is understood to split her time between Melbourne and Perth.
In recent years she has been actuary for the Treasury for its unfunded superannuation liabilities, which includes Gold State Super and another smaller defined-benefit pension fund.
Had the GESB mutualisation gone ahead, Ms Nance's report would have been required to be tabled in parliament under amendments introduced by the opposition to the State Superannuation Amendment Bill 2007, the legislation governing the transfer.
Those amendments were moved by Liberal MLC George Cash who, during debate in September regarding the bill, had sought reassurance from the state government that the state would received independent actuarial advice on the impact of the transition to a full membership company, MutualCo, operating under the GESB banner.
According to Hansard, Mr Cash had warned there was some financial risk for the state and he wanted to ensure advice independent of that provided by GESB's own actuary, Mercer, was received not more than 30 days before the planned transfer date. He also moved for that advice to be tabled in parliament three working days after the order was published in the Government Gazette.
