09/12/2010 - 00:00

Industry, unions eye GESB super reforms

09/12/2010 - 00:00

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THE state government’s progress on restructuring its $11 billion superannuation fund is being watched closely as business looks for opportunities and unions highlight concerns they have with outsourcing plans.

Industry, unions eye GESB super reforms

THE state government’s progress on restructuring its $11 billion superannuation fund is being watched closely as business looks for opportunities and unions highlight concerns they have with outsourcing plans.

In April this year, the state government accepted a series of recommendations from a now-public report authored by Rod Whithear to effectively close down the former government employees’ superannuation board, GESB, and outsource the funds management and administration.

That reversed plans for GESB’s privatisation via a mutual structure.

Huge costs associated with that move, as well as significant tax implications, stalled the process in June 2008.

Among the key Whithear recommendations were allowing government employees to have the choice of superannuation fund, to outsource the administration of some schemes, and to tender for a default government employee superannuation fund manager.

The recommendations are being implemented by a steering committee led by Premier and Cabinet official Stephen Homes. Other members of the committee are GESB CEO Michele Dolin, GESB chairman Phil Harvey, former GESB board member and state Treasury official Michael Court, as well as representatives of Department of Commerce, Public Sector Commission, State Solicitors Office and UnionsWA.

Just what the steering committee has done to date is not public and the state government has chosen not to comment on progress.

The information vacuum has prompted concerns that implementation has stalled and some form of rear-guard action is taking place to preserve GESB. There has also been speculation that GESB operations could be merged in some way with Westcheme, a private sector industry fund that, like GESB, draws half its board members from the union movement.

Westscheme CEO Howard Rosario said the future of the various parts of the GESB fund had been the subject of discussion within his organisation but there was little that could take place until there was clarity around the implementation of the Whithear recommendations.

Mr Rosario said Westscheme was certainly interested in the opportunity to become a default superannuation scheme provider.

UnionsWA boss Simone McGurk, who also sits on the board of Westscheme, said she was concerned about the mooted changes and their impact on GESB existing members.

Ms McGurk said one union concern was the impact of allowing members the choice to leave but not to consolidate other funds into their GESB accounts, which might leave members that chose to stay worse off.

The union was also worried about outsourcing, notably the potential for a private entity to win the management of the valuable default fund, without a comparative analysis of GESB existing service.

“Default fund status is a prize,” Ms McGurk said.

 

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