WHAT’S HAPPENING WITH GESB?

Are you a WA State Public Sector Worker, or have previously worked for the State Government? Chances are you are a member of one of the GESB superannuation funds. If so, you may have already heard that due to State government pressure, GESB are in the process of shutting down their financial advice arm.

So where does this leave GESB members wanting high quality financial advice? Well, let’s face it, there are plenty of advisers out there. However, GESB members need to be particularly careful who they choose to talk to. Let’s take a look at why this is the case.

DIFFERENT STROKES FOR DIFFERENT FOLKS

GESB West State and Gold State superannuation funds are what are known as ‘Constitutionally Protected funds’. To put this simply, they operate under different rules than most superannuation funds. This makes them much more complex, but also potentially much more beneficial than your standard super fund.

Consider this. From the 1st of July this year, the government has limited the amount of money that can be put into super as a concessional contribution to $25,000 per annum. For most employees, concessional contributions consist of your employer contributions (usually 9% of your salary) PLUS amounts salary sacrificed to super.

This change has severely limited the ability for people close to retirement to boost their superannuation savings through the use of concessional contributions. Consider an employee earning $100,000 per annum; their employer will contribute a minimum of $9,000 per annum (9%) into their chosen super fund. This means the member is limited to making an additional $16,000 in annual salary sacrifice contributions before breaching their concessional contribution cap limit (contributions above the cap are taxed at 31.5% in addition to the 15% tax paid by your super fund).

Now consider the same employee with a GESB West State superannuation account. Because of the special rules relating to these funds, there is no annual limit* on how much can be salary sacrificed to West State. As a state public sector employee, the same member mentioned above could theoretically salary sacrifice their whole salary of $100,000 into super.

SO WHAT NEXT?

If you have a GESB West State or Gold State account and are interested in how you could improve your financial position utilising the unique rules available to you, contact your GESB specialists at Profusion Planning. Profusion Planning has first hand insight into the internal workings of GESB, including one of its advisers, Brendon Read, having previously worked at GESB for a number of years prior to joining Profusion Planning.

Brendon is currently helping a number of clients save up to $50,000 per annum in tax by navigating the complex GESB West State and Gold State rules. If you want the confidence that comes from knowing your adviser understands your fund, contact Brendon on (08) 9316 3050 for a free initial discussion on how Profusion Planning can assist.

You can read more about these GESB changes here (http://www.gesb.com.au/cps/rde/xchg/internet/site/index_6354.html?rdeCOQ=SID-524CFE1A-157F2E20).

* GESB West State and Gold State are subject to lifetime concessional contribution caps. Please speak to an adviser at Profusion Planning for further information regarding cap limits and how they may relate to your specific individual circumstances