02/10/2009 - 14:02

Buswell can't unwind GESB chief pay rise

02/10/2009 - 14:02

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Treasurer Troy Buswell has admitted the state government has no power to unwind a $160,000 pay increase to the chief executive of government superannuation fund GESB, Michele Dolin.

Treasurer Troy Buswell has admitted the state government has no power to unwind a $160,000 pay increase to the chief executive of government superannuation fund GESB, Michele Dolin.

Mr Buswell said he had expressed his strong opposition to the board-approved pay rise in a meeting late yesterday with GESB chairman Phil Harvey.

"I expressed to him in no uncertain times my view that a one-off $160,000 pay rise was impossible to justify and I asked that they reconsider their position in relation to that," Mr Buswell said.

"The chairman gave no indication to me at that time that the board would reconsider their position, indeed he continued to defend and justify the $160,000...

"I have no legal power to do anything about it."

The chief executive's pay was set in early 2008, taking Ms Dolin's salary from $370,000 to $530,000.

The public were not made aware of the increase until the release of the annual report late last month. Workers had their retirement savings savaged by the financial crisis during 2008-09, with most default super funds recording double-digit losses.

In a statement released this afternoon, Mr Harvey said the increase in pay was determined in January 2008.

"It has been frozen since that time and we intend to maintain that freeze for the foreseeable future. When considering the matter earlier this year, the board took a hard look at the prevailing global economic environment and took the decision that the salary should be held at the 2008 level," Mr Harvey said.

Mr Harvey said the Board believed that the chief executive's salary appropriately reflected the risk profile of the role and the complexity of the $9.5 billion fund.

He said unlike most of the superannuation funds GESB has been compared with, the super provider was responsible for investment management, in house administration of defined benefits, accumulation and retirement schemes and its own financial advice business.

In August, Ms Dolin accepted a five-year contract to continue as head of the super provider. Her last contract was for two years.

Mr Buswell said he would explore all options to ensure the Hay Group report that the board used to determine the pay increase be made public.

The anticipated mutualisation of the super provider had been under review for some months, with Mr Buswell confirming that a mutualisation was not a certainty.

"We will certainly be assessing the policy options open to government. Mutualisation is only one of those policy options," he said.

 

 

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