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Public Sector super worry

By ROB INGLIS – The Examiner.

A TASMANIAN trade union is concerned about changes to the administration of the state’s $2 billion public sector superannuation fund, sounding the alarm over the potential for falling returns.

Community and Public Sector Union state secretary Tom Lynch has written to members to inform them of the state government’s move to alter the way the Retirement Benefits Fund is managed.

It comes after Premier Peter Gutwein announced in June that the government planned to bring up to $200 million of the RBF’s funds back to Tasmania to be invested in the private sector as part of the state’s COVID-19 recovery effort.

But there’s unrest in the public service over a decision to scale back the administrative model governing the super fund, with the terms of two superannuation commissioners not being renewed and sole responsibility for the management of the new fund now resting with a single trustee: Evelyn Horton, chairwoman of the superannuation Commission.

“It will be Ms Horton alone that will decide whether the $200 million of the assets she is now the sole trustee of should be invested  in a Tasmanian Economic Fund and Social Investment Fund on options identified by [the Premier’s Economic and Social Recovery Advisory Council],” Mr Lynch wrote.

The union says fund members weren’t consulted on the change to the trustees. “We are not saying anyone’s superannuation entitlements are at risk,” Mr Lynch wrote.

“Even if $200 million is taken from the fund, the government is still responsible for the whole unfunded liability.

“[But] … if the government reduce the funds the trustee manages then the returns will fall and the government will need to allocate more money in the budget each year to fund the superannuation of members of the defined benefits scheme as they retire.”

In 2017, RBF accumulation accounts were transferred to TasPlan. But there remains about 5000 members of the RBF’s defined benefits scheme, 9800 RBF pension members and 11,200 people with an interest in RBF.

A government spokesperson said the intent of the Public Sector Superannuation Reform Act 2016 was always to move towards a single-member commission and that the three-member arrangement was designed to be transitional.

“These changes will have no impact on members’ legislative entitlements,” the spokesperson said.

“The chair of the commission, Ms Horton has a wealth of experience in the financial sector and a detailed understanding of the superannuation sector along with strong investment management skills. She will continue to be supported by the Office of the Superannuation Commission.”

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