Treasurer Christian Porter today announced that Expressions of Interest for the provision of the Government Employees Superannuation Board’s (GESB) administrative services would be sought.
Mr Porter said the move followed the decision to allow State Government employees to choose their super fund from March 30, 2012, the central reform recommended in the Whithear Review.
“As a result of this choice reform - which has been overwhelmingly supported by public sector employees - GESB will not have the economies of scale to offer the most cost effective administration services in the long run,” he said.
“If GESB is prevented from exploring options to lower the cost of providing administrative services, the effect could be higher costs to those who do choose to remain with GESB.”
The Treasurer said procuring administrative services from a specialist external provider would be aimed at achieving lower costs to members. Outsourcing should also enable GESB to keep pace with the many superannuation reforms and other challenges in a rapidly changing industry.
Mr Porter said many super funds across the industry were currently procuring administration services from external providers to minimise operating costs and gain efficiencies through economies of scale.
“The Government is undertaking this reform so that GESB will be able to ensure their administrative costs are competitive,” he said.
Mr Porter said the provision of GESB’s superannuation administration services was expected to appeal to the market and should result in better outcomes for both existing members and future State employees, primarily from competitive fees and services to members, particularly over the longer term as the superannuation industry continued to consolidate these services.
“This opportunity to compete for the provision of these services offers the market an exciting opportunity to engage with the State and GESB in these reforms to maintain competitive services to members,” he said.
Treasurer’s office - 6552 5600