Superannuation boost for Government employees

15/12/00
More than 180,000 State Government employees have greater control over how their superannuation is invested and subsequently greater returns under new provisions passed by State Parliament.
Minister Assisting the Treasurer Graham Kierath said Cabinet had recently endorsed a funding mechanism for the unfunded liability in the West State Super scheme that would help provide members with market rates of return.
Mr Kierath said the recently passed State Superannuation Act 2000 would help deliver the products and services that scheme members had been demanding, which included Member Investment Choice from July 1, 2001.
"It will provide scheme members with the flexibility to decide how their superannuation is invested and allow them to access rates greater than the current rate of CPI plus two per cent," he said.
"Providing market rate returns to scheme members has been one of the central concerns of employee groups, and rightly so.
"If people are to be expected to provide for their future through superannuation then the State Government should give them every opportunity to realise the highest returns and that is what we have done."
Mr Kierath said an impediment to the scheme realising market rate returns was the unfunded liability of $536 million, accumulated since its inception in 1992 until 1998 when Government committed to funding all contributions.
The unfunded liability resulted because in the past, only about 30 per cent of employer contributions were actually paid to the GESB. Outstanding retirement benefits were paid as required from Consolidated Revenue.
"The commitment to fully fund contributions effectively capped the unfunded liability," the Minister said.
"Now the recently passed State Superannuation Act has expanded the Government Employees' Superannuation Board's borrowing powers to meet the unfunded liability."
Media contact: Zac Donovan (08) 9213 6400