The Hodgman Liberal Government’s number one priority is jobs.
Following a review of the Retirement Benefits Fund, started under the Labor-Green Government, it became clear that, due to declining membership, and a lack of scale in terms of funds under management, costs would rise over time and it would become increasingly difficult for the RBF to continue to provide the same high quality service to members.
As a result it was recommended to the Government that we should exit the role of providing superannuation through the RBF and that consideration should be given to seeking a merger partner that, in all likelihood, would see the assets and management of the fund be transferred to a mainland based superannuation fund.
The decision to take this course of action, in the Government's view, needed to be weighed against the risk that the other major Tasmanian Superannuation fund providers TasPlan and Quadrant (who have agreed to merge separate to this process) would also in time come under similar pressures in terms of scale and the possibility that they too could exit the state, taking jobs with them to merge with larger funds on the mainland in the medium term.
This would mean that potentially over time Tasmania would not have a major locally based superannuation fund in the State and jobs and expertise would be lost to the mainland.
In the Government's view, this would not be in the State's best interests. Therefore I asked the RBF to hold discussions with TasPlan & Quadrant – to consider and develop a business case on the feasibility of a single Tasmanian superannuation fund.
That business case concluded that a merger would be in the best interests of their respective memberships, and the Government has today entered into a Memorandum of Understanding with RBF, TasPlan and Quadrant to go through a process of due diligence under the standard national rules, and subject to it being in the best interests of members, create a single Tasmanian superannuation fund.
The creation of the new Superfund will secure Tasmanian jobs and ensure that Tasmanians continue to benefit from the presence of a competitive and viable superannuation fund in their state. The merged entity also will promote job growth, provide opportunities for local businesses through Tasmanian investments, and support the expansion of the Tasmanian financial services sector. Having a Tasmanian-based superannuation fund will provide a stronger likelihood that Tasmanian investment opportunities will be on the radar, by comparison to these three funds being absorbed into a large mainland superannuation operation.
This new Superfund will be the largest business by size of balance sheet in Tasmania, servicing around 165,000 members and managing over $6.5 billion. It will be in a strong position to compete in the wider Australian superannuation industry and attract new business and new jobs to Tasmania.
Subject to due diligence, confirmation by the respective Boards and enactment of enabling legislation, it is anticipated that the merged entity will be created by the end of 2016. This merger will follow the completion of the already announced merger of TasPlan and Quadrant expected to be completed by the end of the year.
Once it is up and running, the new Superfund will become the default fund for Tasmanian public sector employees, and importantly, members will retain their choice of superannuation fund.
The RBF’s Defined Benefit Schemes will continue to be the ongoing responsibility of Government and will continue to be administered under an outsourced model with a new tender for the service to commence at the completion of the current contract. There will be no change to the design or entitlements of any of these schemes.
Today’s decision is an important step towards securing and creating Tasmanian jobs, driving investment and attracting business to our State.