CHOICE OF SUPER Choice of Super choice! super future 1 A guide for current and former Western Australian State Government employees
super future choice! Content About choice 3 What choice means for WA State Government 4 employees What choice means for former WA State Government 4 employees Who gets to choose 5 Understanding the different super schemes 6 Accumulation schemes 6 Defined benefit schemes 6 How Choice works 8 Option 1 Do nothing 8 Option 2 Choose a new super fund 9 and tell your employer Some other important issues 10 Information and advice 11 Updated February 2015 2
CHOICE OF SUPER About choice The WA State Parliament amended the State Superannuation Act 2000 to provide choice of superannuation fund for WA State Government employees from 30 March 2012. Since then, most State Government employees have had the right to choose which super fund their employer superannuation contributions are paid to. Information about choice of fund for employers and current and former employees can be obtained from your HR officer and from the Department of Treasury s Public Sector Superannuation portal at www.treasury.wa.gov.au/superannuation 3
super future choice! What choice means for WA State Government employees Most State Government employees are able to choose where their employer Superannuation Guarantee (SG) contributions are paid. New employees of the WA State Government are also offered their choice of fund. If you don t make a choice, your employer SG contributions are paid into the fund chosen by your employer. A GESB administered scheme is currently the nominated fund (also known as the default fund) for most State Government employers. If you are unsure of your employer s default fund you should contact your HR Officer. What choice means for former WA State Government employees If you are no longer employed by the WA State Government and are working elsewhere you may be able to choose a fund for your employer super contributions. As a former WA State Government employee, your current employer SG or salary sacrifice contributions cannot be paid to a GESB scheme. GESB administered accounts are unable to receive these contributions from outside the WA public sector because they are in a constitutionally protected fund. If you have several superannuation accounts, fees and charges could be reducing your overall super investment. Usually it is better to consolidate your super into the one account with your current employer. However before you decide to roll over your super consider independent advice on whether it is in your best interests to do so, as you may not be able to rejoin a scheme you may have left. 4
CHOICE OF SUPER You can register for the Australian Tax Office s online services and use SuperSeeker (ato.gov.au/superseeker) to check all your super accounts, find and ATO-held or lost super, and transfer your super into one account using a simple online form. Who gets to choose Choice of fund applies to State Government employees who receive Superannuation Guarantee (SG) contributions, and is also offered to new employees of the WA State Government. Defined benefit schemes such as Gold State Super and the Pension Scheme pay a specified benefit based on a particular level of contribution made by the member. For this reason, choice isn t available to employees whose contributions are currently made to these schemes. Contributing members of Gold State Super are able to withdraw from the scheme and direct their employer to make future SG contributions to any complying fund. Employees who wish to withdraw from Gold State Super should seek independent financial advice relevant to their personal circumstances before making a decision. For more information contact GESB on 13 43 72 or visit www.gesb.com.au 5
super future choice! Understanding the different super schemes In most cases, if you work for the WA State Government, and haven t chosen a different super fund, your employer pays superannuation contributions into a GESB administered scheme. Here are the main super schemes managed by GESB: Accumulation schemes West State Super GESB Super In an accumulation scheme your super account builds up over time, like when you add money to your bank account. Your account grows according to how much you contribute, the length of time your super is invested, the fees and costs deducted and the overall investment performance of your chosen investment plan. West State Super closed to new members in 2007 Your employer may have selected a default fund other than a GESB scheme. If that is the case, choice of fund also applies to SG contributions paid to any accumulation scheme with that super fund. Defined benefit schemes Gold State Super Pension Scheme A defined benefit scheme is a type of super where your final super benefit is determined by applying a fixed or defined formula, usually based on your length of service, your contributions and your final salary. Members of this type of scheme are not able to choose an Investment Plan, because the benefit is defined and doesn t depend on investment returns. 6
CHOICE OF SUPER Choice of fund doesn t apply to contributions to defined benefit schemes. However, contributing members of Gold State Super are able to elect to withdraw from the scheme and direct their employer to make future SG contributions to any complying fund. You cannot access or roll over your preserved benefit with Gold State Super until you reach preservation age and no longer work for the State Government. Your preservation age is 55 years if you were born before 1 July 1960, increasing progressively to 60 years if you were born on or after 1 July 1964. Current preservation ages are provided on the Australian Taxation Office website, www.ato.gov.au This restricted access is typical of defined benefit schemes, and is not affected by choice. You are only able to choose which fund your future SG contributions will go to. Your future contributions won t impact your existing Gold State Super benefit, which will be preserved until you reach preservation age. For more information about Gold State Super contact GESB on 13 43 72 or visit www.gesb.com.au You should seek independent financial advice relevant to your own situation and personal circumstances before making a decision to withdraw. 7
super future choice! How Choice works If you are eligible to choose a superannuation fund, your employer will give you a Standard choice form within 28 days of the starting work for the State Government, or transferring to a different State Government agency. The form sets out your options for choosing a superannuation fund. When you receive a Standard choice form from your employer you have two options: Option 1 Do nothing If you don t make a choice, your employer super contributions will be paid into the fund chosen by your employer. In most cases, a GESB administered scheme is the default fund for State Government employers, however your employer may have selected another default fund. If you are unsure of your employer s default fund you should contact your HR Officer. You do not have to complete the form. You may choose a superannuation fund later if you wish. 8
CHOICE OF SUPER Option 2 Choose a new super fund and tell your employer You can choose the super fund you want your employer contributions paid into. Your chosen fund must be a complying superannuation fund or retirement savings account and your employer must be able to make contributions to the fund. Your chosen fund will give you the information you need to provide to your employer, including a letter from the fund trustee or RSA provider confirming that the fund is complying and will accept payments from your employer. If you choose your self managed super fund (SMSF), you will need to include a document confirming that the fund is regulated (printed from superfundlookup.gov.au) and a letter from the trustee confirming that the fund will accept payments from your employer. (If you are the trustee, or a director of the corporate trustee, you can confirm this on the form.) You must give your employer details of your chosen fund by completing the Standard choice form, or providing all the necessary information in writing. Otherwise, your employer isn t obliged to accept your choice. Once you ve provided all the required information for your chosen fund, your employer has two months to organise the administrative details so they can make contributions to that fund. After the two-month period ends, any contributions your employer makes for you must be to your chosen fund. (Your employer can start making contributions to your chosen fund earlier if they wish.) You should compare the features of your current fund and new fund, before making a change. See the superannuation portal at www.treasury.wa.gov.au for more information. 9
super future choice! Some other important issues You can choose as often as you want As a State Government employee, there is no restriction to the number of times you can change funds through your employer. But remember that superannuation is designed to be a long term investment and there may be financial consequences for changing funds frequently for example, exit fees. If your employer disregards your choice If you have supplied all of the required information, your employer is obligated to accept your choice of fund. If they don t, talk to your employer, get the facts and, if you re not satisfied with the response, contact the Australian Taxation Office (ATO) on 13 10 20 to discuss your situation. Voluntary super contributions The choice of fund legislation applies to the SG contributions made by your employer. Additional super contributions you or your employer make such as after tax contributions or before-tax salary sacrifice contributions can also be made to any eligible super fund. If you would like your employer to pay these voluntary superannuation contributions into your chosen fund, you will need to discuss this with your HR Officer. 10
CHOICE OF SUPER Information and advice Free information For more information see your HR Officer or visit the Department of Treasury s superannuation portal www.treasury.wa.gov.au If you want to choose a new super fund, check out these free sources of information: The Australian Securities and Investments Commission s website at www.moneysmart.gov.au or call 1300 300 630. The ATO s website at www.ato.gov.au/super or call 13 10 20. West State Super and GESB Super are the default fund accounts for most State Government employers. For more information about GESB schemes call 13 43 72 or visit www.gesb.com.au. If your employer has selected another default fund contact the relevant fund. If you are unsure of your employer s default fund contact your HR Officer. Getting independent financial advice If you are approaching retirement, you have complex tax or investment needs, you have large amounts in superannuation, or you just find super complex and confusing, you should seek advice from a licensed financial adviser. Asking your employer Your employer will be able to give you the facts about choice of superannuation fund, the employer default fund, and how you nominate your chosen fund. However, advising you on which super fund you should choose, or recommending that you consolidate your superannuation into one account, is likely to be considered as financial advice. In general, the law requires anyone giving financial advice to be licensed by the Australian Securities and Investments Commission, so do not seek financial advice from your employer unless they are licensed to provide it. 11
Information including advice ( information ) provided in this brochure is given in good faith and solely on the basis that you are responsible for making your own assessment of it and that you obtain your own independent advice. The information should not be construed to waive any legal obligations on your part. The State of Western Australia and its servants expressly disclaim any liability and responsibility for the information contained in this brochure. Persons relying on this information waive and release the State of Western Australia and its servants to the full extent permitted by law from any and all claims relating to the use of the information. The State of Western Australia and its servants do not accept liability for any injury, loss or damage incurred by reliance on the information. This publication may not be reproduced or copied, except with the express permission of the Department of Treasury.