30/07/2009 - 00:00

Buswell appoints super expert to review GESB

30/07/2009 - 00:00


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Buswell appoints super expert to review GESB

THE state government is to conduct a review of the plan to privatise GESB, which manages as much as $9 billion in superannuation funds.

Treasurer Troy Buswell announced that Rod Whithear, a federal public servant currently working on superannuation policy in the Federal Department of Finance and Deregulation, had been seconded to the Western Australian public service to review all aspects of the proposed mutualisation of GESB.

The mutualisation of GESB, the former Government Employees Superannuation Board, was to have turned over ownership of the fund manager to members of the accumulation funds.

However, the process was halted at the 11th hour by former treasurer Eric Ripper amid concerns regarding the amount of reserves expected to be provided to the group, which was supposed to be mutualised the next day, July 1 2008.

The issue arose because some schemes were old-style defined benefits - with members' payouts based on their final salary rather than funds accumulated and invested in the markets - which meant they could not be mutualised and the responsibility remained with state.

The issue of the tax status of at least one of the accumulation schemes also created headaches at Treasury, which had overseen the mutualisation but ultimately gave advice to Mr Ripper to stop the process.

In opposition, Mr Buswell had been a supporter of the mutualisation but appears to have had misgivings since becoming treasurer.

In the interim, the global financial crisis has wiped out significant funds under management, including reserve funds held for various reasons, including economic downturns.

"The Whithear Review will provide independent advice to me on how we can reinvigorate the stalled reform process ... while the state's and members' interests are protected," Mr Buswell said.

While the terms of review remain unknown, it is reportedly due to be completed by the end of 2009, 18 months after the original mutualisation deadline and more than a year after a series of high-profile appointments were made by GESB to prepare the organisation to enter the commercial world.

In June last year, GESB appointed Greg Newman as general manager distribution. Mr Newman was previously national head of distribution and sales at Advance Asset Management. Last September, Martin Hedley was made head of strategy.

A month later, the proposed new entity for the mutualised GESB announced the appointment of its inaugural board, to be chaired by former Alcoa Australia chief Wayne Osborn.

The new directors were: Peter Warne (director of Macquarie Bank, ASX Ltd and Sydney Futures Exchange Ltd); Keith Spence (non-executive director Clough and Geodynamics and former executive vice-president of Woodside Energy); Andre Morony (board member of Macquarie Private Capital Group and ABN AMRO Investments Australia, former chief economist and chief investment officer at BT Group, and former chief investment officer of ARIA); Fiona Harris (former Board member of HBF and Alinta, former chair of GESB); Harvey Collins (non-executive director of Navitas Ltd and HBF, deputy chairman of Verve and GESB director); and managing director Michele Dolin.


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