06/02/2015 - 14:50

Local funds’ rich pickings

06/02/2015 - 14:50

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The number of super funds in WA may be in decline, but those that have stayed have grown substantially.

ON TOP: GESB is the largest fund registered in WA. Photo: Attila Csaszar

The number of super funds in WA may be in decline, but those that have stayed have grown substantially.

There are just nine superannuation entities registered in Western Australia with about $25 billion in funds under management, down from more than a dozen in 2011 as the sector seeks efficiencies amid growing competition.

As operators try to reduce costs in a market influenced increasingly by technology such as mobile banking, some have moved east to join larger operators.

The most recent move in this progression was the 2014 merger of local player the Coal Industry Superannuation Board with Auscoal Super, sending around $160 million of savings to NSW.

CISB was previously a state government-legislated entity.

Former WA major Westscheme joined with east coast-based AustralianSuper in 2011, building a fund that reported assets of $78 billion at the end of the 2013-14 financial year, while Worsley Alumina Superannuation Fund has also moved east, and is now managed by NAB subsidiary Plum Financial and registered in Melbourne.

The shift started as early as 1997 when St. George Bank bought Asgard (then known as Sealcorp Holdings); despite a presence here, its funds are registered in Sydney as part of Westpac.

But a number of those that have stayed are enjoying growth.

GESB is by some way the largest provider registered in the state, with almost $19 billion in funds under management.

The fund had a stellar 2014, coming third nationally in a comparison compiled by Super Ratings and ranked on returns.

The government enterprise, which is now chaired by prominent Perth businessman John Langoulant, was considered for privatisation by the previous Labor government, although the plan was abandoned due to high costs.

Instead, the state government passed laws enabling public servants to invest in alternative funds, ensuring competition to the provider.

GESB has nearly doubled its asset base during this period, giving it the lion’s share of the state’s market.

The state’s second-largest fund, WA Super, has also grown substantially, tripling its size during the past decade more than $2.1 billion.

The fund, which was formerly WA Local Government Super, has opened up its doors to the public for membership, making it and Concept One the only open funds based in WA.

Former RAC WA president Tim Shanahan started a term as chair of the WA Super board on July 1, while City of Cambridge Mayor Simon Withers was appointed a director soon after.

WA Super general manager (Client services) Paul Owen said that opening the fund had supported its growth.

"There’s a large percentage of our members that don't work in local government," he said.

"Some of those might have started out in local government but many of them haven't.

"We actively sign up other employers now who choose to use us as their default.”

Mr Owen said another part of the success had been a desire among Western Australians for a local fund.

"Many of our members take a proactive approach and are actually doing something extra than just getting their employer contributions,” he added

"If you look at the percentage of our members that do something above the standard employer SG amounts, it’s much greater than what the general public is across Australia."

He said WA Super had a very active program briefing and providing advice to its members about superannuation, particularly in regional areas.

“We travel to every town in the state that has a local council,” he said.

Another growth fund has been Concept One, which has more than doubled in size in the past five years.

The fund, which is registered in West Perth, merged with The Industry Super Fund in 2013.


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