Choice of super was introduced on 30 March 2012 for all WA public sector employees. This means you can choose which complying super fund your employer's super contributions are paid into, or you can do nothing and continue to have your employer contributions paid into your GESB account.
GESB's super schemes are unique. It's important you understand the implications of stopping employer contributions into your current scheme, including the opportunities that will no longer be available to you.
If you are thinking about stopping your employer contributions into West State Super or rolling over your account balance to another super fund, please be aware of the implications and the features that will no longer be available to you:
Bringing forward payment of tax. West State Super is an untaxed scheme and if you roll over your benefit to a taxed super fund you will be taxed on the taxable component - untaxed element by the other fund at a rate of 15% when it is received. So immediately, you'll have up to 15% less invested in super and earning investment returns.
Limits on before-tax (concessional) contributions. Most individuals can only contribute $30,0001 of concessional contributions per financial year into super and still be subject to concessional tax treatment. With West State Super, you can contribute more into super each year because concessional contributions made to your West State Super account are not counted towards your concessional contribution cap. In West State Super you can accumulate an untaxed benefit of up to $1.415 million2 and still be concessionally taxed.
You can't change your mind. West State Super is closed to new members. If you choose to close your account you will not be able to re-join the scheme in the future.
1 For the 2016/17 financial year. The concessional contributions cap is indexed in line with Average Weekly Ordinary Time Earnings in increments of $5,000 rounded down. If you were aged 49 years or over on the last day of the previous financial year, then a temporary higher concessional contributions cap of $35,000 is available for the 2016/17 financial year. This temporary higher cap is not indexed and will cease when the general concessional contributions cap is indexed to $35,000. 2 Untaxed plan cap per super fund for the 2016/17 financial year, indexed annually for future years.
Gold State Super
As a defined benefit fund, your final Gold State Super benefit is determined by applying a fixed, or 'defined', formula. The key variables that impact your retirement benefit are your salary, years of service and your Average Contribution Rate. Gold State Super is not market linked, so members' funds are not impacted by the performance of investment markets.
If you are a contributing member of Gold State Super you will need to withdraw from the scheme before you can direct your employer to make future Superannuation Guarantee contributions to another complying fund. When you withdraw from Gold State Super, your benefit will be calculated and preserved in the fund until you meet a condition of release. If you are under 55 or still working in the public sector, you cannot roll your Gold State Super over to another super fund. It is preserved at GESB until you are at least 55 and no longer working in the WA public sector.
While preserved at GESB, your Final Benefit will accumulate interest in accordance with the State Superannuation Regulations 2001 at the rate of Perth Consumer Price Index (Perth CPI) plus 1% per annum until age 55, and then indexed annually at Perth CPI plus 2% per annum.
Withdrawing from the scheme could result in a significantly reduced benefit in retirement because your salary and years of service, key variables used to calculate your Final Benefit, may be lower now than they would be when you retire.
The fund you open to receive your future employer contributions will be subject to fees and your benefit will be exposed to movements in investment markets. You will also be charged premiums for any insurance cover that you have.
If you withdraw from Gold State Super you can't contribute to it in the future. Your decision is irreversible.
Be sure you are aware of the consequences of withdrawing from Gold State Super. The Gold State Super essentials brochure has detailed information, or you can contact your Member Services Centre on 13 43 72.
GESB Super is a taxed scheme that offers automatic insurance cover for eligible members, below-median3 fees, sound investment returns and efficient investment costs.
If you choose to stop employer contributions or roll over your GESB Super account to another fund, please be aware that you will no longer have access to the following features and services:
Choice of investment plans. We provide a choice of investment plans, from growth to conservative, each targeting a different level of risk and return. This allows you to choose the best mix of assets to suit your investment goals and risk tolerance.
Comprehensive, tailored Death and Total & Permanent Disablement insurance through our Insurer. If you meet the conditions for automatic cover, you don't need to provide medical or personal history. Your cover will start automatically when we receive your first WA public sector employer super contribution. Even people in hazardous occupations may be eligible for automatic cover. You also have the flexibility to tailor your cover to suit your personal circumstances.
Educational tools. We offer a range of educational tools to help you make the most of your super, including seminars, webinars and online calculators. If you need more help, your Member Services Centre is available Monday to Friday 7.30am - 5.30pm (WST).
3 SuperRatings Smart database as at 31 March 2016.
Choosing a new fund
If you do decide to choose a new super fund for your employer contributions, you will need to complete the Standard choice form and provide it to your employer.
If you would like to roll your super from GESB into another super fund, you can do so by using a 'Benefit access' form4. This form is available by calling your Member Services Centre on 13 43 72.
An exit fee of $515 will be deducted from your GESB Super or West State Super account each time you transfer all or part of your benefit to another super fund. For more information, please refer to the relevant Product Information Booklet.