Is GESB Superannuation a good super fund?
Choosing the right superannuation fund is a critical decision for securing a comfortable retirement. For many Western Australians, the Government Employees Superannuation Board (GESB) offers several options. In this article, we will explore three of GESB’s main products: West State Super, Gold State Super, and GESB Superannuation. By examining their features, benefits, and potential drawbacks, including the unique taxation benefits of West State and Gold State Super, we aim to help you determine if GESB Superannuation is the right choice for your retirement savings.
West State Super
GESB West State Super is an untaxed and market linked scheme that has been closed to new members since 2007. It is primarily available to Western Australian public sector employees who joined before this date. One of the key features of West State Super is its flexibility. Members can choose their investment options, ranging from conservative to high-growth portfolios, depending on their risk tolerance and retirement goals.
Benefits:
- Investment Choice: Members have the flexibility to select from a range of investment options, allowing them to tailor their superannuation to their individual risk preferences and financial goals.
- Low Fees: West State Super is known for its competitive fee structure, which can help maximize the growth of your retirement savings over time.
- Insurance Options: The fund offers a variety of insurance options, including life, total and permanent disability (TPD), and income protection cover.
- Taxation Benefits: As an untaxed fund, West State Super does not pay tax on contributions or earnings. This can result in significant tax savings and potentially higher returns for members.
Drawbacks:
- Closed to New Members: Since West State Super is no longer open to new members, only those who joined before 2007 can benefit from its features.
- Limited Portability: Transferring your superannuation balance to another fund can be complex and may involve additional fees or loss of certain benefits.
Gold State Super
Gold State Super is a defined benefit scheme, which means that the retirement benefits are calculated based on a formula that considers factors such as salary and years of service, rather than investment returns. This scheme is also closed to new members and is available only to those who joined before December 1995.
Benefits:
- Predictable Retirement Income: One of the main advantages of Gold State Super is the predictability of retirement benefits. Members receive a defined benefit based on their salary and years of service, providing a stable and reliable income in retirement.
- Inflation Protection: The benefits are indexed to inflation, ensuring that the purchasing power of your retirement income is maintained over time.
- Employer Contributions: The scheme includes generous employer contributions, which can significantly boost your retirement savings.
- Taxation Benefits: Similar to West State Super, Gold State Super is an untaxed fund. This means it does not pay tax on contributions or earnings, offering substantial tax advantages and potentially higher net returns for members.
Drawbacks:
- Lack of Flexibility: Unlike market linked schemes, Gold State Super does not offer investment choice, which means members cannot tailor their investment strategy to their personal risk tolerance or financial goals.
- Closed to New Members: As with West State Super, Gold State Super is not available to new members, limiting its accessibility.
GESB Superannuation
GESB Super is the current offering for new members. It provides a range of investment options and is designed to cater to the diverse needs of its members.
Benefits:
- Investment Choice: Members can choose from a variety of investment options, including balanced, growth, and conservative portfolios, allowing for a personalized investment strategy.
- Competitive Fees: GESB Superannuation offers a competitive fee structure, which can help maximize the growth of your retirement savings.
- Insurance Options: The fund provides a range of insurance options, including life, TPD, and income protection cover, offering peace of mind and financial security.
Drawbacks:
- Market Risk: As a market linked scheme, the value of your retirement savings is subject to market fluctuations, which can impact the final amount available at retirement.
- Complexity: With a wide range of investment options and insurance products, navigating the choices available can be complex and may require professional financial advice.
Conclusion
GESB Superannuation offers a variety of options to suit different needs and preferences. West State Super and Gold State Super provide benefits for long-standing members, including significant tax advantages due to their untaxed status. Meanwhile, GESB Superannuation caters to new members with its flexible investment choices and competitive fees. Each scheme has its own set of advantages and potential drawbacks, making it essential to consider your individual circumstances and retirement goals when choosing a superannuation fund. Consulting with a financial advisor can also help you make an informed decision and ensure that your retirement savings are on track to meet your future needs.
If you’re a member of either GESB West State or Gold State, regularly review your fund’s performance, understand your investment options and fees, and ensure that your contributions are adequate to meet your retirement goals.
Our GESB financial advice specialists can help you understand your GESB superannuation options and help you make informed decisions about your retirement.
Wealthwise financial advisers have extensive experience in understanding and providing advice around the complexities of providing GESB advice on West State and GESB Gold State. If you are currently employed, or have been employed within the WA State Government sector and hold either of these funds, making contact with a Wealthwise financial adviser will ensure you are maximising the opportunities available to you.