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Superannuation Act 1976 - Commissioner for Superannuation - Report, incorporating report on the administration of the Commonwealth Superannuation Administration and/or Retirement Benefits Office pursuant to the Public Service Act, for - 1993-94


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C O M M I S S I O N E R / o r S U P E R A N N U A T I O N

A n n u a l r e p o r t

1 9 9 3 - 9 4

comsiPR super excellence

COMMISSIONER

for

SUPERANNUATION

ANNUAL REPORT

1993-94

© Commonwealth of Australia 1994

ISSN 1031-8585

This work is copyright. Apart from any use as permitted under the Copyright Act 1968, no part may be reproduced by any process without prior written permission from the Australian Government Publishing Service. Requests and inquiries concerning reproduction rights should be directed to the Manager, Commonwealth Information Services, Australian Government Publishing Service, GPO Box 84, Canberra ACT 2601.

Previously published as:

• Annual Report o f the Superannuation Fund Management Board, from 1922-23 to 1928-29;

• Annual Report of the Superannuation Board, from 1929-30 to 1975-76;

• Annual Reports of the Superannuation Fund Investment Trust and the Commissioner for Superannuation, from 1976-77 to 1988-89 {also Interim Reports, from 1976-77 to 1992-93).

See also the annual reports of the: Commonwealth Superannuation Board of Trustees No.l Commonwealth Superannuation Board of Trustees No.2 Military Superannuation and Benefits Board of Trustees No.l Defence Force Retirement and Death Benefits Authority and Commonwealth Funds Management Ltd.

All of the aforementioned reports are tabled before Parliament

Produced by the Australian Government Publishing Service

Commonwealth Superannuation Administration (ComSupcr)

Postal Address: Telephone: Facsimile: Annual Report inquiries:

Street Address: Unit 1 Cameron Offices, Chandler Street,

Bclconnen ACT 2617 PO Box 22, Bclconnen ACT 2616 (06) 252 7911 (06) 253 1116

Scheme Promotions Group Telephone: (06) 252 7528

Note: All contribution, benefit, membership and exit statistics are based on events related to the annual reporting period as reflected in the records of the Commissioner at the time these statistics were compiled. The figures may vary from the records of these events as recorded by departments and authorities.

Where historical statistics are quoted, these may vary from previously published statistics due to the application of retrospective adjustments that are now reflected in this report.

Annual statistical tables are not published in the appendices of this report. Where readers require access to these statistics, they are available, upon request, from the Scheme Promotions Group (telephone (06) 252 6888, facsimile (06) 251 1470).

Any descriptions in this report relating to the provisions of the Acts administered are not definitive. These descriptions do not carry the authority of the Acts concerned. Consequently, the descriptions used shall not prevail over the actual provisions of the pertinent legislation.

In accordance with revised Annual Report Requirements issued by the Department of The Prime Minister and Cabinet in March 1994, certain issues reported on in this report are a brief overview only. Where readers require more substantial

information, they should lodge a request for the information with the Schemes Promotion Group on the telephone number appearing above.

The Hon. Kim C. Beazley, MP Minister for Finance Parliament House Canberra ACT 2600

Dear Minister

In accordance with section 162 of the Superannuation Act 1976 and section 34C(2) of the Acts Interpretation Act 1901, I present to you my annual report on the general administration and operation of the Superannuation Act 1976 (other than Parts IIA, III and IVA and section 154A) and the superseded Superannuation Act 1922, during the year ended 30 June 1994.

This report also covers the general administration of Commonwealth Superannuation Administration - ComSuper - (formally the Retirement Benefits Office), thus fulfilling the reporting requirements of subsections 25(6-7) of the Public Service Act 1922 and section 8 of the Freedom o f Information Act 1982.

Yours sincerely,

K. A. Searson Commissioner for Superannuation and Chief Executive Officer 4 October 1994

Contents

F o re w o rd .......................

Commissioner’s overview Introduction................................................................................................................................ 1

Part A

Report of the Commissioner for Superannuation

Commissioner’s obligations Transactions on the Scheme Membership .

Contributor exits Contributions Benefits Preservation

Classification of contributors........... 9

Administrative decisions of the Com m issioner............................... 9

Review of invalidity pensioners . . . 11 Reconsideration of decisions made by Commissioner and delegates . . . 11 External review of decisions made by

Commissioner and delegates . . . 12 Significant Federal Court and AAT d e c isio n s.......................................... 13

Administration of the Commonwealth Superannuation Scheme

5 5 6 7

8 8 9

Part B

Commonwealth Superannuation Administration

Organisational structure

Review and Legal

Internal Reconsideration ................. 22

External Review ............................... 23

Legislation and Advisings .............. 24

Client Communications

Secretariat and Invalidity Assessment 25 Schemes P ro m o tio n ......................... 26

Member and Employer Communications .......................... 26

Human Resource Management . . . 27

Business Operations

Civilian Member Services .............. 29

Business Analysts ................................ 31

Retirement, Preservation and Military Member S e rv ic e s......................... 31

Business Systems

O n g o in g .................................................33

IT M odernisation............................... 33

Business M anagem ent......................... 35

v

a. S'

vi Contents

Program performance

Program 1: Delivery of occupational superannuation schemes for Commonwealth Government employees

Description ............................................39

Major activities.................................. 40

Resources .............................................. 41

Social J u s tic e ..................................... 41

Primary Administration

Description ........................................ 43

Issues confronted during 1993-94 . 43 Collection of contributions and payment of benefits .................... 44

Recording of contributions and determination of benefits ........... 44

Invalidity retirem en t......................... 46

Counselling and inform ation........... 47

Legislation m atte rs............................ 48

Reconsideration and review

Description ........................................ 49

Operation .............................................. 49

Internal reconsideration.............. 49

External re v ie w ............................ 50

Issues confronted...................................50

Program 2: Delivery of Defence Force schemes

Description ........................................ 51

Major activities.................................. 52

R e so u rc e s.............................................. 52

Social justice .........................................53

Primary administration

Description ........................................ 55

O perations........................................... 55

Resources ........................................... 55

Issues confronted............................... 56

DFRDB activities ............................ 56

MSBS activities.................................. 57

Reconsideration and review

Description ........................................ 59

Resources ........................................... 59

O perations........................................... 59

DFRDB ........................................ 59

Internal ..................................... 60

E xternal..................................... 60

MSBS .......................................... 61

Internal ..................................... 61

E x ternal..................................... 61

Program 3: Delivery of corporate services

Description ........................................ 63

Major activities.................................. 63

Issues confronted............................... 63

Resources ........................................... 64

Social J u s tic e ..................................... 64

Program perform ance....................... 64

Information Technology.............. 64

Human Resource Management . . 66 Business A ccounting.................... 68

Industry S ta n d a rd s ....................... 70

Business Liaison .......................... 71

Quality M anagem ent.................... 74

Property and S e rv ic e s ................. 76

Corporate S u p p o r t....................... 76

G lossary.....................................................127

In d e x .......................................................... 129

Appendixes

Freedom of Information Act statement 79 ComSuper staffing info rm atio n............ 87 Occupational Health and S a fe ty ........... 83 Financial Statements ............................. 91

Industrial D em ocracy............................ 85 Index of requirem ents............................... 123

Contents vii

Tables

1. Significant statistics of the Commonwealth Superannuation S c h e m e ....................... 4 2. Commonwealth Superannuation Fund: contribution and benefit transactions, 1993-94 ............................................................................................................................. 5

3. Commonwealth Superannuation Scheme: Consolidated Revenue Fund transactions, 1993-94 ............................................................................................................................. 6

4. Reconsideration: requests received by the Commissioner and action taken, 1989-90 to 1993-94 ...................................................................................................... 12

5. Administrative Appeals Tribunal decisions 1989-90 to 1993-94 ............................. 13

6. Significant statistics of the civilian superannuation sc h e m e s.................................. 40

7. Financial and staffing resources summary - Program 1: 1993-94 41

8. Financial and staffing resources summary - Program component 1.1: 1993-94 . . 43 9. Categories of correspondence received: 1993-94 ...................................................... 47

10. Information seminars conducted: 1993-94 ................................................................. 48

11. Financial and staffing resources summary - Program component 1.2: 1993-94 . . 49 12. Significant statistics of the Defence Force superannuation schemes ..........................51 13. Financial and staffing resources summary - Program 2: 1993-94 ....................... 52

14. Financial and staffing resources summary - Program 2.1: 1993-94 .................... 55

15. Financial and staffing resources summary - Program 2.2: 1993-94 .................... 59

16. Financial and staffing resources summary - Program 3: 1993-94 ....................... 64

17. Person days spent by ComSuper personnel in formal training activities, 1993-94 68 18. EEO target groups participating in formal training activities, 1993-94 ................. 68 D 1. Operative staff as at 30 June 1994 ............................................................................... 87

D 2. Operative staff: by classification and gender as at 30 June 1994 .......................... 88

D 3. Operative staff: classified by age group and gender as at 30 June 1994 ............. 88 D 4. Permanent staff: recruitment 1993-94 88

D 5. Permanent staff: separations 1993-94 .......................................................................... 89

D 6. Permanent staff: promotions 1993-94 .......................................................................... 89

D 7. Part-time staff as at 30 June 1994 ............................................................................... 89

D 8. Temporary staff: by gender and classification as at 30 June 1994 .......................... 89

D 9. Inoperative full-time staff as at 30 June 1994 .......................................................... 90

D10. Equal employment opportunity: by type of group and classification as at 30 June 1994 ..................................................................................................................... 90

Figures

1. CSS contributor profile by age, number and s a l a r y ...................................................... 6

2. CSS contributor exits 1993-94 ........................................................................................ 7

3. Retrenchments as a percentage of CSS exits (excluding transfers) 1988-94 7 4. CSS pensions granted and in force: 30 June 1994 ......................................................... 8

5. Senior Executive organisational structure: as at 30 June 1994 .................................... 20

6. Branch organisational structure: as at 30 June 1994 ...................................................... 21

7. ComSuper staffing levels 1993-94 .................................................................................. 67

Foreword

This report has been produced in two parts.

Part A reports on the legislative responsibilities of the Commissioner for Superannuation in relation to his administration of the Commonwealth Superannuation Scheme established under the Superannuation Act 1976 (and the superseded 1922 Act).

Part B highlights the activities of Commonwealth Superannuation Administration (ComSuper), for which the Commissioner is the Chief Executive Officer, in respect of the general administration of occupational superannuation schemes.

Part B also reports on ComSuper’s responsibilities in administering the CSS and PSS schemes on behalf of the Boards of Trustees in the performance of their separate functions and also in providing administrative assistance to the Military Superannuation

and Benefits Scheme (MSBS) Board of Trustees and the Defence Force Retirement and Death Benefits (DFRDB) Authority in the administration of the superannuation schemes for the Australian Defence Force. Each of the Boards and the Authority produce their own annual reports covering their specific responsibilities.

Some instances may occur where certain activities are reported in both parts of this report or in the reports produced by the Boards of Trustees and the Authority. Where possible, duplication has been kept to a minimum and occurs only to maintain continuity.

ix

Commissioner’s overview

The past year has been one of ongoing change for the Office. Not the least of these changes was the change of name, on 1 March 1994, to that of Commonwealth Superannuation Administration (ComSuper) and the signing of contracts for the redevelopment of the Office’s computer systems.

The motivation for the Office name change was the redefining of ComSuper’s future strategy, with an emphasis on living up to the new corporate logo, that of Super Excellence.

In striving to attain super excellence, ComSuper has developed a workable strategy of continuous improvement which aims to transform the Office into one of Australia’s foremost superannuation administrators; a supplier of superannuation services that are comparable with, if not better than, those offered by the best in the public and private sectors.

The key elements of the strategy incorporate the redevelopment of the Office computer systems, the introduction of service level agreements with our major client agencies, adopting the principle of ‘user pays’ for non-core services provided to client agencies and the vigorous pursuit of best practice by means of benchmarking against our peers in the superannuation

industry.

Benchmarking showed that both the cost and time taken by ComSuper to pay benefits compared reasonably well with many of our peers in the superannuation industry. But, we compared unfavourably with those peers who would be considered to have obtained best practice. Studies have shown that the main cost drivers in the payment of ComSuper benefits

are staff salaries and computer operation charges (both notional and actual). The impediments to standards of service (as measured by time taken to make payment) arise from multi-step production line type processing and from incomplete computer systems. The latter problem is exacerbated with each passing year as the inherent inflexibility of the systems technology necessitates increasing exception case processing.

To break this cycle and provide the agency with the opportunity to deliver competitive services requires parallel courses of action to redesign business processes and build complementary computer systems. New business processes will be built on the "one stop shop" principle to eliminate segmentation of processing which is wasteful both of lime and

human resources. Computer systems will need to provide complete coverage of benefit payment types, be flexible in design to readily accommodate change, and be operated on a technical platform with much lower operating costs than the current Department of Finance mainframe.

These initiatives are necessary for the achievement of ComSuper’s corporate goal for the delivery of competitive services.

xi

xii Commissioner’s overview

The required changes will not happen overnight. In any organisation (be it public or private sector) efficient and effective change cannot happen without the full and committed cooperation of all staff. I am very pleased to say that, from the very beginning, all staff were involved in the strategic planning process, and contributed enthusiastically to the setting of the goals we want to achieve.

The changes being experienced within ComSuper are unprecedented. They entail re­ engineering of our business processes and practices, development of specifications for the new technology and adjusting the staffing numbers and profile in order to live within our pre­ determined budget while still maintaining a high level of service to our clients and meeting all demands imposed by legislative machinery. The opportunity was also taken to initiate legislative reforms which will simplify administrative processes without detracting from new benefit design. Given that, of necessity, this has entailed considerable demands, it is not surprising that concerns have been aroused among some staff. This culminated in the union notifying a dispute before the Industrial Relations Commission. While this led to a pause in the re-engineering of ComSuper’s business processes and practices, the pause was subsequently lifted and continuous improvement measures have resumed.

ComSuper can boast some notable achievements from the reform processes and these are outlined throughout this report. The business re-alignments and continuous improvements foreshadowed in last year’s report have already produced pleasing results culminating in an enhanced reputation for quality service to ComSuper’s clients.

Yet, much more remains to be done and we do not underestimate the task ahead of us. I am confident that we will continue to improve and the tools afforded by the new technology, once implemented, will result in further improvement with more interesting and challenging work for ComSuper staff. That, in turn, will translate to a much improved service to our clients.

My thanks go to the staff who have made such a huge effort, and who have come forward with creative solutions to problems. While that attitude remains, I am confident that ComSuper will achieve its mission.

My thanks also go to the Boards of Trustees for their commitment and cooperation. Similarly, we are fortunate in enjoying a close working relationship with the Departments of Finance and Defence as well as the many employing agencies on whom ComSuper relies so heavily for support.

Introduction

Background

The Commissioner for Superannuation is a statutory office holder with the power and responsibility of the secretary of a department for the purposes of the staffing and financial administration of Commonwealth Superannuation Administration (ComSuper).

The Commissioner is responsible for the general administration of the closed Commonwealth Superannuation Scheme (CSS) - this responsibility was transferred to the Commonwealth Superannuation Board of Trustees No. 2 on f July f994 - and certain closed Papua New Guinea (PNG) superannuation schemes. The Commissioner is Chairman of the DFRDB

Authority (he has delegated this role to the Assistant Commissioner, Review and Legal Branch),and, through his role as Chief Executive of ComSuper, provides administrative support to the Authority in the general administration of the closed Defence Force Retirement Benefits (DFRB) Scheme and Defence Force Retirement and Death Benefits (DFRDB)

Scheme. Administrative support is also provided to the Commonwealth Superannuation Board of Trustees No. 1 in the general administration of the Public Sector Superannuation (PSS) Scheme, to the Commonwealth Superannuation Board of Trustees No. 2 in respect of the Board’s responsibilities in relation to the Commonwealth Superannuation Scheme (CSS) and

to the Military Superannuation and Benefits Board of Trustees No. 1 in the general administration of the Military Superannuation and Benefits Scheme (MSBS).

For administrative purposes, the PSS Board delegated the bulk of its general administrative powers and functions under the Trust Deed and Scheme Rules to the Commissioner for Superannuation and to the staff of ComSuper. The Board retained its principal powers of policy formulation (including investment), invalidity assessment and reconsideration of primary decisions made by delegates. Similarly, the CSS Board retained its principal powers of policy formulation (including investment), invalidity assessment and reconsideration of

primary decisions made by delegates and, from 1 July 1994, delegated the bulk of its general administrative powers and functions (other than those functions mentioned above) to the Commissioner and staff of ComSuper.

Part A

Report of the Commissioner for Superannuation

on the

Administration of the Commonwealth

Superannuation Scheme

4 Administration o f the Commonwealth Superannuation Scheme

The Commonwealth Superannuation Scheme

Key Statistics

Table 1. Significant statistics of the Commonwealth Superannuation Scheme

1992-93 1993-94

Contributors in force at 30 June

M ales 75 939 69 037

Females 35 240 31 953

Total 111 179 100 990

Total contributions received $316 069 000 $294 435 428

Contributor exits during year

Age 1 459 1 376

R etrenchm ent 4 135 5 047

Invalidity 244 206

D eath 95 151

Resignation and other 1 918 1 805

T ransfers to other schemes 7 889 1 604

Total 15 740 10 189

Pensions in force at 30 June

Age 40 460 40 551

Invalidity 30 775 29 934

R etrenchm ent 5 252 7 036

Spouses and orphans 25 296 25 831

Total 101 783 103 352

Annual pension liability $ 1 590m $ 1 629m

Average yearly adult pension $ 15 904 $ 15 975

D eferred benefits in force at 30 June 6 098 5 167

Number of benefits deferred during year 479 526

Administration of the Commonwealth Superannuation Scheme 7

Contributor exits

Retrenchments, resignations and transfers to other superannuation schemes dominated the modes of exit for 1993-94, as shown in Figure 2 below. Retrenchments represent the single largest mode of exit at 49.5 per cent of all CSS exits.

Transfers to other superannuation schemes (15.7 per cent of exits) arc a relatively temporary statistical aberration, but have proven to be significant in terms of the demands on ComSuper’s resources.

Figure 2. CSS contributor exits 1993-94

Π Age retirement Invalidity Retrenchment Death Resignation Tfr to other schemes

Preservation

Retrenchments have been a major feature of CSS exits since 1990. Figure 3 highlights the increasing prominence of retrenchments as a mode of exit. Although the effect is more pronounced due to the significant decreases in other types of exit over the same period, it is still notable that, proportionally, retrenchments have grown from 9.3 per cent for 1988 to 58.8 per cent for 1994 (excluding transfers), averaging 4 723 retrenchments per year over the last five years.

Figure 3. R etrenchm ents as a percentage of CSS exits (excluding transfers) 1988-94

1987-88 1989-90 1991-92 1993-94

Year

8 Administration o f the Commonwealth Superannuation Scheme

A handful of employers collectively account for more than 86 per cent of the retrenchments during the 1993-94 year. These were the Department of Defence, the Department of Transport and Communications, the Department of Veterans’ Affairs (including Repatriation hospitals), the Department of Administrative Services, and GBEs including Telecom, Australia Post and Australian Defence Industries.

Contributions

The total contributions receivable during the year were $294.4 million. This represents a decrease of 6.8 per cent from last year’s total ($316 069 271). This decrease reflects a membership drop of 10 189 and the fact that the CSS was closed to new members on 1 July 1990.

Members of the CSS are required to contribute a minimum of 5 per cent of their salary. However, members can voluntarily elect to contribute up to 10 per cent and, in some special cases, contributions can be as high as 15 per cent. The most common contribution rate during the year was 5 per cent of salary (83.5 per cent of members) and 10 per cent of salary (2.3 per cent of members).

Benefits

As at 30 June 1994, there were 103 352 CSS pensioners resulting in an annual pension liability of $1.63 billion. This liability comprises $310 million arising from the Superannuation Act 1922 and $1.32 billion from the Superannuation Act 1976. This represents a 2.5 per cent increase over last year, of which 1.2 per cent is due to indexation

(i.e. $1.92 million).

Consistent with recent years, retrenchment benefits represent the most significant proportion of the pensions commenced. Retrenchments constitute 37.2 per cent of the pensions commenced during 1993-94 (see Figure 4).

Figure 4. CSS pensions granted and in force: 30 June 1994

Pensions In force: 30 June 1994 (103 352) Pensions granted: 1993-94 (4 895)

Q Age retirement §§ Invalidity retirement g Retrenchments fgg Dependants

Administration o f the Commonwealth Superannuation Scheme 9

The average pension paid to the 101 621 adult pensioners is $15 975 p.a., which is an increase of 0.45 per cent on 1992-93. The net increase in the number of CSS pensioners was 1 569. The pension averaged over all CSS pensioners (that is, including 1731 childrens’ pensions) for the year was $15 760 p.a.

A total of 3 251 persons, eligible to receive a pension, opted instead to receive a lump-sum payment. Of these, retrenchments accounted for approximately 99 per cent. The average payment received by all lump-sum recipients was $95 469.

Preservation

Generally, when members who have completed at least five years’ continuous government employment resign from the scheme they may elect to receive a lump sum payment, consisting of a refund of accumulated contributions, plus accrued interest, or to preserve their superannuation benefit. Preservation lakes one of two forms, either:

1. a transfer value to another eligible superannuation scheme; or

2. if ineligible for a transfer value, the preserved benefit will become a deferred benefit, payable on retirement from age 55 (or earlier, in cases of invalidity or death).

Of the 1 160 members who resigned during the year and were eligible to preserve their benefit (excluding age retirements), 527 (42 per cent) elected to do so. This represents a significant improvement over the previous year when only 9 per cent elected to preserve their benefits and demonstrates the success of the awareness campaign conducted by the Office to highlight the benefits of preservation. By not electing to preserve their benefit, exiling members gave up their right to an employer-financed supplement, equivalent to at least 12.5 per cent of their salary.

Classification of contributors

During the year, 46 requests to vary or revoke a Benefit Classification Certificate (BCC) were considered. BCCs were issued to CSS members, upon entry to the scheme, when there was a real risk of the member being unable, because of some pre-existing medical condition, to reach maximum retiring age. Conditions which may give rise to early retirement on

medical grounds are specified in the certificate. Medical retirement of a member with less than 20 years’ contributory service, on any of the grounds listed in a BCC, will result in a reduced benefit.

Of those requests received to vary or revoke a BCC, three were refused, 35 were revoked, three lapsed and five were varied.

Administrative decisions of the Commissioner

Classification o f former contributors

If a contributor with less than 20 years’ contributory service is medically retired, the Commissioner must decide if the cause relates to a condition noted on a BCC. This decision

10 Administration o f the Commonwealth Superannuation Scheme

is also made when a member dies or has salary reduced due to some mental or physical incapacity.

Invalidity retirement

The invalidity retirement process is designed to enable a thorough assessment of a person’s condition and to fully consider prospects of rehabilitation and/or retraining before the Board issues an invalidity retirement certificate. This certificate is only issued when the Board considers an employee to be totally and permanently incapacitated, that is, unlikely to work again in a position for which the person is reasonably qualified by education, training and experience, or could become so qualified after retraining.

While the process may, in a minority of cases, take up to two years (typically, if there are aspects of rehabilitation or redeployment yet to be explored), there is provision for this process to be shortened where the Board is satisfied that the nature of the medical condition clearly warrants a finding of total and permanent incapacity. It would be expected that such cases would be finalised within two weeks if the necessary documentation is in order.

There were 206 contributors who exited from the CSS on the grounds of invalidity during the year (2.4 per cent of total exits, excluding transfers to other schemes). Of these, 157 were retirees who had accumulated less than 20 years’ contributory service, the length of time that a BCC remains in force. Of the 157 retirees, 20 (9.7 per cent of all invalidity retirements) had their benefit entitlement reduced due to the application of a BCC.

Pre-assessment payments

The legislation provides for payment of pre-assessment payments which ensure that a person who is (or is likely to become) totally and permanently incapacitated is not left without income while his or her case is assessed.

Applications for pre-assessment payments and/or the issue of an invalidity retirement certificate are normally made to ComSuper through the applicant’s employer. Medical evidence needs to be as comprehensive as possible. If the person wishes to be paid pre­ assessment payments, the employer must include a medical report completed by a Commonwealth Medical Practitioner (or other Board- approved medical practitioner) who has examined the person and considers that the person is, or is likely to become, totally and permanently incapacitated.

Pending formal consideration of the case for invalidity retirement, where a person not receiving compensation payments has been on sick leave for 28 days or more, and the Board is satisfied that the person is likely to be totally and permanently incapacitated, it may approve pre-assessment payments. If the documentation is in order the decision to approve payment of pre-assessment payments would be made within two weeks from the date of receipt of the application.

During the year the Board of Trustees considered 224 pre-assessment payment applications. Of these 219 were approved and five were refused.

Administration o f the Commonwealth Superannuation Scheme 11

The Board also approved four invalidity retirements without reference to the assessment panel as they were satisfied that the person was totally and permanently incapacitated.

Partial invalidity pensions

If a member’s salary is permanently reduced due to the existence of a medical condition which precludes that member from performing his/her normal duties, then the member may be eligible to receive a partial invalidity pension.

Twelve partial invalidity pensions were granted to such members during the year.

Review of invalidity pensioners

Continued payment of an invalidity pension is dependent on a periodic review of the pensioner’s circumstances. The Commissioner is obliged to consider the pensioner’s other earnings and the current level of incapacity from the condition causing the retirement. Earnings exceeding a prescribed limit can result in some reduction of the benefit paid. An improvement in the member’s health can result in re-employment with appropriate adjustments to the pension benefit.

Pensions suspended because o f earnings

As a result of personal earnings reviews conducted on 4190 invalidity pensioners during the year, 902 declared personal earnings. The number of invalidity pensioners subject to full or partial suspension (due to revised earnings) decreased from 230 to 214. The suspension (or reduction) of these pensions resulted in the total pension payment being reduced by

$2.06 million per annum.

Pensions suspended because o f restored health

A total of 18 medical examinations were arranged to review invalidity pensioners’ continued level of incapacity. Of these, seven were found to be fit to resume duty and were re­ employed, thereby enabling cancellation of their pensions.

Four pensions (previously suspended for 12 months for failure to respond to a review notice) were cancelled. A further 19 pensions were suspended as a result of the members’ failure to respond to requests for information, or failure to attend a medical examination.

Seven pensions were cancelled following members’ reappointment to the Australian Public- Service.

Reconsideration of decisions made by Commissioner and delegates

The Superannuation Act 1976 provides for reconsideration of decisions made by the Commissioner or his delegates. A person dissatisfied with a decision may request that the matter be reconsidered. The request should be lodged within 30 days of notice of the decision. Disputed decisions are thoroughly investigated (concerning fact and law) by officers

12 Administration o f the Commonwealth Superannuation Scheme

not associated with the original decision. The Commissioner is required to make a new decision and provide a statement of reasons.

Requests for reconsideration numbered 370 for the year; 231 were brought forward from 1992-93 and 139 new requests were lodged. There were 186 requests finalised during the year, comprising:

• 23 primary decisions (12.37 per cent of those finalised) revoked after reconsideration:

• 29 decisions (15.6 per cent of those finalised) varied;

• 110 decisions (59 per cent of those finalised) unchanged; and

• 24 requests (12.9 per cent of those finalised) lapsed or withdrawn.

A total of 184 requests were carried forward. Full details of reconsideration applications received and outcomes for the past five years are shown at table 4 below.

Table 4. Reconsideration: requests received by the Commissioner and action taken, 1989-90 to 1993-94

1989-90 1990-91 1991-92 1992-93 1993-94

R equests brought forward 392 381 219 282 231

R equests received during the year 272 147 193 112 139

R equests withdrawn or lapsed 64 87 31 21 24

Decisions confirmed 56 64 51 100 n o

Decisions varied 67 68 16 19 29

Decisions revoked 96 90 32 23 23

Requests resolved during the year 283 309 130 163 186

R equests carried forward 381 219 282 231 184

As in recent years, the majority of requests received related to late claims by members for preservation of rights from prior periods of contributory service.

From 1 July 1994 the CSS Act was amended so that decisions formerly taken by the Commissioner are now taken by the CSS Board of Trustees, or their delegates. Transitional provisions mean that decisions taken before this date are still reviewable by the Commissioner and appellable to the Administrative Appeals Tribunal (AAT).

External review of decisions made by Commissioner and delegates

After a matter has been reconsidered by the Commissioner, the person affected by the decision can appeal to the AAT and the Federal Court. Appeals to the AAT are allowed under section 154 (6) of the CSS Act, and appeals to the Federal Court arise through the provisions of th & Administrative Decisions (Judicial Review) Act 1977 [the AD (JR) Act] and section 44 of the AAT Act 1975.

During the year four appeals were lodged before the Federal Court, one of which was by the Commissioner and three by the applicants. As at 30 June 1994, the Court had handed down three decisions. The appeal lodged by the Commissioner was rejected by a single judge, while one of the appeals lodged by the applicants was rejected by the Full Federal Court.

Administration of the Commonwealth Superannuation Scheme 13

A single judge upheld an appeal which had been lodged by the Commissioner the previous year and subsequently, an appeal was lodged with the Full Federal Court by the applicant. Two appeals remain outstanding as at 30 June 1994.

Fifty two applications for review were lodged before the AAT and 39 were carried over from the previous year. Of the 42 applications resolved during the year, 11 decisions were affirmed by the AAT, two decisions were varied in the Commissioner’s favour and thirteen applications were decided in favour of the applicant, of which five matters were conceded by the Commissioner. Eleven applications were withdrawn and subsequently dismissed. The AAT had no jurisdiction in five matters as each of the decisions in question had not been

reconsidered by the Commissioner. There were 49 cases on hand as at 30 June 1994. Details of the outcome of the applications to the AAT for the five-year period ending 30 June 1994 are set out in Table 5 below.

Table 5. Administrative Appeals Tribunal decisions 1989-90 to 1993-94 Applications (to A A T during year) 1989-90

(29)

1990-91 (24)

1991-92 (23)

1992-93 (52)

1993-94 (52)

Five-year total

Finalised: Decision affirmed 5 4 2 9 11 31

Decision varied Comm issioner’s favour 1 3 2 6

A pplicant’s favour 1 2 - - 0 3

Decisions set aside 3 5 4 9 13 34

Decisions set aside and rem itted for further reconsideration Dismissed under section 42a of the A AT Act 3 10 13

W ithdrawn 6 - 9 8 11 34

Beyond A A T jurisdiction and not reconsidered by Commissioner 4 7 3 5 19

Decision not reviewable 2 1 - - - 3

Removed from list - 1 - - - 1

TOTAL 24 24 25 29 42 144

Significant Federal Court and AAT decisions

Of significance during the year were two Federal Court decisions relating to late election for preservation of superannuation rights under subsection 157(1) of the CSS Act and a decision dealing with the power under subsection 7(2) to deem a person to have been retired on the ground of invalidity due to physical or mental incapacity to perform his duties.

In Chalk v Commissioner for Superannuation, 19 AAR 450, and Commissioner for Superannuation v Boardman, 123 ALR 239, the Federal Court has provided firm guidance on how the discretion under subsection 157(1) of the CSS Act can be properly exercised.

14 Administration o f the Commonwealth Superannuation Scheme

That subsection grants the Commissioner the discretion to treat an election made outside the period prescribed by the Act as if it were made within the period allowed, if, in all the circumstances of the case, it is desirable to recognise the late election. In Chalk, the Federal Court took the view that when considering ‘all the circumstances’ as required by the Act, the decision-maker must consider not only the relevant circumstances existing at the time the person resigned, but also (somewhat curiously) those circumstances existing at the time the discretion is to be exercised. Furthermore, the Court said that the exercise of the discretion does not depend on there having been fault on the part of the officers of the superannuation scheme or of the relevant employer, although lack of advice may be relevant. In Boardmun, the Court held that the test of whether it is desirable in all the circumstances of the case to allow a late election is an objective test which will involve the balancing of being fair in order to do justice between the person who seeks to make the late election, and the requirements of the administration of the Fund. It is clear from these two Federal Court decisions that all cases involving late election for preservation will have to be decided on the particular facts of each case.

In Commissioner for Superannuation v Trimnell, 19 AAR 51, the Federal Court was asked to determine whether the words ‘his duties’ in subsection 7(2) of the Act referred only to a person’s substantive duties or whether such words were capable of embracing the duties the person was actually directed to perform by way of temporary transfer at the time of resignation. In the alternative, the Court was asked whether it was permissible to have regard to actual duties performed when exercising the discretion contained in subsection 7(2). The Federal Court held that subsection 7(2) of the 1976 Act does not refer to the duties of the person’s position or office but refers only to ‘his duties’ which must relate to the person’s actual obligation to perform duties at the time his services are terminated. It was also held that, in any event, redeployment was a matter that was a relevant consideration in the exercise of the discretion.

The importance of the Court’s decision is that it prevents the unintended consequences that would flow from the view initially taken by the Tribunal that unless formal redeployment action was implemented, all persons who ceased to be eligible employees prior to 2 September 1991 and who were unfit for their substantive duties must succeed in an application for the exercise of the discretion under subsection 7(2) of the Act. An appeal was subsequently lodged with the Full Federal Court in respect of this decision.

The Court’s reasoning does not disturb the AAT’s approach to applications for late election which was established as a result of the Tribunal’s decision in Liddle and Commissioner for Superannuation 14 AAR 456 The Commissioner has consistently adopted the principles embodied in that decision.

Part B

Operations

of

Commonwealth Superannuation Administration

OOffiRKIPF? super excellence

ComSuper operates from a central location in the Cameron Offices complex in Canberra

Here, receptionist Maria Rosin assists a client

Commonwealth Superannuation Administration

Commonwealth Superannuation Administration (ComSuper) changed its name irom the Retirement Benefits Office (RBO) on 1 March 1994. The new name was designed to more accurately reflect the role of the Office in the ever-changing and increasingly business oriented superannuation industry.

ComSuper provides administrative support to the Commissioner for Superannuation, three superannuation Boards of Trustees and the Defence Force Retirement and Death Benefits Authority. Each of the Boards and the Authority produce annual reports relating to their respective schemes.

As a superannuation administrator, ComSuper’s activities for each scheme administered involve:

• promotion of superannuation as an important element of the employment conditions for Commonwealth Government employees and members of the Defence Force;

• collection and recording of member contributions;

• collection of employer contributions;

• determination and payment of benefits;

• administration of entry and medical provisions;

• meeting internal and external review requirements;

• provision of information and/or counselling for members;

• provision of advice on legislative issues; and

• provision of administrative and secretariat support services to the Boards of Truslees and the Authority.

ComSuper is currently funded from Budget appropriations and operates from a central location in the Cameron Offices, Belconnen ACT. ComSuper had, at 30 June 1994, a staffing complement of 412 personnel.

This year has been one of unprecedented and continuing change for ComSuper. Major steps initiated in 1992-93 to promote the new corporate culture and implement a new strategic direction based on a business-like approach with a strong client focus were enhanced during the year. The principal changes arose from the development of the Corporate Vision, Mission

17

18 Commonwealth Superannuation Administration

and Corporate Goals. The new Corporate Plan titled ‘Transformation to High Performance’, which was prepared during 1992-93, was formally endorsed by the Minister earlier this financial year.

Future strategy

On March 1st 1994, in conjunction with the announcement of the change of name of the Retirement Benefits Office to Commonwealth Superannuation Administration, the Commissioner unveiled the Office’s new future strategy.

The strategy incorporates nine key elements, the most vital component being the redevelopment of the Office’s outdated computer systems. Other elements of the strategy are:

• ‘One-stop shop’ philosophy - with the aid of new technology, underpinned by business process re-engineering, our ambition is to be able to facilitate an expeditious response to client inquiries;

• Paperless processing - through image type techniques and computer networking, improve the processing of membership and benefit applications;

• Service-level agreements - in order to establish sensible, clearly understood working arrangements with our client agencies, we will seek to negotiate service-level agreements with all major client agencies;

• User pays - as a means of introducing further discipline and accountability into our business practices, we will be seeking to introduce ‘user pays’ arrangements for non-core services provided to client agencies;

• Develop closer links with the financial planning industry - recognising the close relationship between the superannuation industry and the financial planning industry, we will explore ways of establishing closer links with financial advisers;

• Enhanced role in providing advice to the Trustees - given our close association with the various Boards of Trustees, we will position ourselves to be able to provide a quality service to those Trustees, including, where appropriate, the provision of policy and strategic advice;

• Increasing reliance on externally generated revenue - in order to fund enhanced services and develop new products, we will be seeking out ways of generating revenue by pursuing sensible business opportunities; and

• Benchmarking / Best Practice - in our quest for continuous improvement, ComSuper will be vigorously pursuing best practice by benchmarking against peers in the wider superannuation industry.

Organisational structure

The Commissioner’s 1992-93 annual report provided details on the restructuring of the branches to more accurately reflect the Office’s strategic and business direction.

Fine tuning of the restructuring has continued during 1993-94, the principal changes being the amalgamation of the Secretariat with the Invalidity Assessment Section within the Client Communications Branch, the transfer of the Human Resource Management Section from the

Business Management Branch to the Client Communications Branch, the establishment of a Business Liaison Group within the Business Management Branch and the restructuring of the Business Systems Branch to incorporate the IT Modernisation Project, which received funding approval in the 1993-94 budget.

The redefining of the Office’s future strategic direction has resulted in the need for further restructuring of the organisation. For this reason, despite extensive development by managers, at 30 June not all branches had completed appropriate performance indicators that accurately reflect their new or revised responsibilities.

Restructuring has resulted in an organisational model where the responsibility for delivering the budgeted programs is spread across more than one branch and further, most branches now have responsibilities that encompass all three program components.

The five operational branches are controlled by the ComSuper Executive which comprises the statutory office of the Commissioner for Superannuation, the Deputy Commissioner (Senior Executive, Band 2) and five Assistant Commissioners (Senior Executive, Band 1).

The executive management of ComSuper involves the development of short-term and long­ term strategic plans which integrate government objectives with budgetary considerations in the fulfilment of statutory and other mandatory responsibilities. Each Assistant Commissioner is directly responsible for one operational branch.

The following description of the functions of each branch also incorporates details of activities which cannot be accurately reported under a specific program activity. Details of specific activities associated with the operation of the superannuation schemes can be found later in this report under the program descriptions.

19

20 Commonwealth Superannuation Administration

Figure 5. Senior Executive organisational structure: as at 30 June 1994

Ι ϋ

Commissioner for Superannuation

Ken Searson

Assistant Commissioner Review & Legal Services

Ron Whithear Provide quality review and legal services to m eet the corporate objectives and obligations

Assistant Commissioner Client Communications —— .....................

Tom Dawes Provide high-quality, client-centered com m unications and corporate human resources support

Assistant Commissioner Business Operations

Pat Hayes Provide high-perform ance superannuation services for public sector and military em ployers and schem e members

Deputy Assistant Commissioner

Commissioner | Business Systems II

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Peter Skinner

David Lilley Provide h igh quality and cost-effective inform ation system s and services to support corporate goals

Assistant Commissioner Business Management

John McCullagh Foster and d evelop a business approach to C om Super’s capacity and reputation as a superannuation administrator

Organisational structure 21

Figure 6. Branch organisational structure: as at 30 June 1994

Review and Legal Services

Client Communications

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Review and Legal

This branch has responsibility for:

• investigating requests for the reconsideration of decisions made by:

- the Commissioner;

- the DFRDB Authority;

- the Commonwealth Superannuation Board of Trustees No. 1;

- the Commonwealth Superannuation Board of Trustees No. 2;

- the Military Superannuation and Benefits Board of Trustees No. 1; and

- their delegates.

• appearing before the Administrative Appeals Tribunal (AAT) and instructing counsel in Federal Court matters;

• providing internal legal advice on the application and interpretation of legislation; and

• drafting instruments and determinations required under the CSS, PSS and MSBS legislation.

Internal Reconsideration

In its task of investigating requests for reconsideration of decisions, the Branch has developed performance indicators to reflect the following goals:

• prompt, thorough and cost effective investigation of requests for reconsideration of reviewable decisions; and

• compliance with standards imposed by section 25d of the Acts Interpretation Act 1901 in the documentation of decisions, i.e. provision of the reasons for the result of the reconsideration and findings on questions of fact with reference to the evidence or other material on which those findings are based.

Although administrative review is resource intensive, the branch is committed to providing ongoing support to this important aspect of ComSuper activity. The contribution made by ComSuper personnel in this area have not gone unnoticed as favourable comments have been made by the AAT of the quality of submissions placed before it in the past. In 1993-94, expenditure by the branch represented some seven per cent of total ComSuper funding for administering all schemes. At the same time, measures have been progressively introduced to refine existing procedures so as to maximise cost effectiveness. For example, costs relating to internal review of decisions in the civilian schemes were reduced, on average, by over 28 per cent per case in 1993-94 from that of the previous year. Study of comparative costs with other

22

Review and Legal Branch 23

schemes also revealed that continuation and development of inhouse legal services was a cheaper and better option than outsourcing (a realisation of more and more scheme administrators). A Core Process Redesign study will be conducted in the Branch in the coming year with the aim of identifying further ways of improving program delivery.

Valuing the activities of the Review and Legal Services Branch to the Commonwealth in terms of stewardship of public funds is, in the end, a vexatious issue. As part of their social policy program, successive Federal governments have long seen the need to have in place mechanisms for review of decisions by officials. By providing both internal and external avenues for review of decisions made under Federal superannuation legislation, the Commonwealth is, of course, recognising that additional public moneys will, inevitably, be expended on paying benefits that, short of judicial review, would not have been payable.

The aims of any stage of the review process are to ensure that the correct or preferred decision, in accordance with the specific relevant provisions of the legislation, is made on the basis of an objective appraisal of all the facts of the particular case. By assisting in the decision making process, whether it be by way of reconsideration, external review, or advising on the application and interpretation of legislation, the Branch is sharing in ComSuper’s general responsibility to scrutinise carefully the spending of public money. In

particular, through its participation in matters heard by external review bodies, the Branch has been successful in ensuring, as far as possible, that cases are decided in line with intended government policy. One significant example recently publicised has been the question of whether or not to allow persons with prior CSS contributory service late elections for preservation of their entitlements. By devoting sufficient resources to allow thorough

investigation of disputed cases and by dealing with each case on its merits, ComSuper has ensured that unintended liability from the Consolidated Revenue Fund has been averted.

External Review

Decisions taken in the administration of the CSS, PSS, DFRB, DFRDB, MSB and PNG schemes are susceptible to review by the Federal Court under the AD (JR) Act. Appeals to the Federal Court may be based on any of the legal grounds set out in sections 5, 6 and 7 of the AD(JR) Act, including:

• errors of law;

• denial of the rules of natural justice;

• improper exercise of power;

• failure to observe procedures; or

• unreasonable delay in making a decision.

The ambit of decisions which may be reviewed under the AD(JR) Act includes decisions made by:

• the Commissioner for Superannuation;

• the CSS, PSS and MSB Boards;

24 Commonwealth Superannuation Administration

• the DFRDB Authority; or

• their delegates.

Prior to 1 July 1994, virtually all reconsideration decisions taken by the Commissioner under the 1976 Act, the Papua New Guinea (Staffing Assistance) Act 1973, the DFRDB Authority under the Defence Force Retirement and Death Benefits Act 1973 and the Defence Forces Retirement Benefits Act 1948 were reviewable by the AAT. Furthermore, under the Administrative Appeals Tribunal Act 1975, a party to a proceeding before the AAT may

appeal to the Federal Court on a question of law from any decision of the AAT in that proceeding. Details of matters appealed to the AAT and the Federal Court appear on pages 13 (Commissioner) and 60 (DFRDB Authority).

Legislation and Advisings

In response to the introduction of the Superannuation Industry (Supervision) Act 1993, the branch made a presentation to the CSS and PSS Boards of Trustees on the likely effect of this Act upon their responsibilities as trustees. This presentation included a discussion of the changes required to comply with the SIS Act, the broad scope of the penalties introduced, and the degree of protection afforded to the Boards against such penalties. The Boards were also advised of the introduction of the Superannuation (Resolution o f Complaints) Act 1993 which establishes the Superannuation Complaints Tribunal to deal with complaints of aggrieved scheme members and the effect of this Act on the arrangements in place in relation to applications for review.

Detailed comments were provided to the Department of Finance on the administrative and legal implication arising from the proposed changes to the Superannuation Legislation Amendment Bill 1994.

Client Communications

This branch was established in the Office restructure and assumed responsibility for most of ComSuper’s external communications. It also assumed the responsibility for providing secretariat support for the three Boards of Trustees, human resource issues and administering invalidity assessment and review of eligibility of invalidity pensioners for both the civilian and military schemes.

Secretariat and Invalidity Assessment

Secretariat

The Secretariat provides administrative services to the MSBS, CSS and PSS Boards of Trustees. Issues dealt with during the year include:

• appointment of a master custodian for the MSB Fund;

• the re-appointment of the independent investment adviser for the MSBS;

• the development of long-term strategies for the two civilian schemes in relation to the removal of legislative ties to the scheme’s current, sole investment manager, Commonwealth Funds Management Limited (CFM), by 30 June 1995; and

• reviews of investment policy/strategy, funds performance and interest allocation methods.

Invalidity Assessment

Invalidity Assessment is responsible for;

• the classification and review of retirees of the Defence Force schemes;

• the review of civilian schemes invalidity pensioners in relation to personal earnings and restoration of health;

• coordinating the collection of medical evidence for submission to the invalidity assessment panel which is responsible for assessing requests from members for retirement on invalidity grounds;

• arranging pre-assessment payments to members, pending the outcome of their application for invalidity retirement.

Disability Claims Management and Counselling Service (DCMC) was appointed as the assessment panel charged with the review of medical evidence relating to potential civilian invalidity retirements on 1 July 1992. The contract was renewed for a further two years from 1 July 1993. The assessment panel reviews medical evidence relating to civilian invalidity

retirements and makes recommendations to the Boards of Trustees on the basis of that medical evidence.

25

26 Commonwealth Superannuation Administration

Schemes Promotion

This group carries the primary responsibility for producing major Office communications. This includes member information books and leaflets, videos, new starter’s kits, employer newsletters, forms, Boards of Trustees newsletters and annual reports as well as other communication material.

The Group’s major achievements for the year included:

• the implementation of the change in name of the Office to ComSuper;

• the development of a ComSuper communication strategy;

• the continued development of employer communication channels using the newsletter Super News',

• the introduction of a newsletter for military employees; and

• the commencement of marketing campaigns, specifically targeting potential PSS members and generally towards increasing members’ awareness of the value of their superannuation.

The response to the Office’s communication strategy has been positive, with Senator Watson, Chairman of the Senate Committee on Superannuation, in his speech on the Superannuation Legislation Amendment Bill 1994 saying, in regard to the publications, News Update and ACCESS:

7 would like to table these quality documents. I believe they set a standard for the private sector to follow and therefore the ComSuper group, which was responsible for the publications, should be congratulated in this respect’.

Member and Employer Communications

The role and function of the unit is to achieve cost effective delivery of services to clients, the primary role being the dissemination of information which will enable members of the schemes to gain a clear understanding of their entitlements on retirement.

Improvements in correspondence turnaround limes were accompanied by (and derived from) improvements in the standards of automated letter production, including simplification of the language used and an increase in the information provided. The introduction of other technology based improvements, such as the Interactive Voice Response (IVR) telephone service, have been predicated by the requirement to provide more information efficiently and effectively while restricting cost increases. Further development of the IVR system, expanding and refining its operation, will occur during 1994-95.

The high level of redundancy activity within APS departments and approved authorities continued during 1993-94. Preparation of benefit estimates for prospective ’involuntary retirement’ separations comprised 69 per cent of all pre-retirement estimates prepared during the year.

Client Communications Branch 11

This higher level of redundancy activity is a direct result of the increase in the sale or transfer of Commonwealth assets, with the impact of special superannuation provisions applicable to those members transferring to the new owner/authority. Major redundancy exercises completed during the year included provision of superannuation counselling services to all CSS/PSS members that were required to make superannuation decisions due to the sale or transfer of the Snowy Mountains Engineering Corporation, Repatriation General Hospital, Hollywood, and the Pipeline Authority. Each of these agencies were required to meet processing costs incurred by ComSuper in providing this superannuation advice.

The volume of, and the limited time frames for, processing these large volumes of requests has necessitated the imposition of a processing fee in some circumstances - particularly where the proposed ComSuper service standard does not meet the requirements of the requesting agency. ComSuper imposes additional processing fees to cover the cost of providing a higher standard of service.

Such fees, amounting to $ 26 250 for the year, are accounted for under ComSuper’s Section 35 Agreement with the Department of Finance. Major clients attracting processing fees included the Departments of Defence and Administrative Services, the Australian National Audit Office, the Federal Airports Corporation, Australian Defence Industries, the Australian Quarantine Inspection Service and the ACT Government.

Technology improvements have been implemented, changing the established methods of client contact. On March 1st 1994, ComSuper introduced an Interactive Voice Response (IVR) telephone system, in a pilot format, to trial and develop direct telephone access for both members and beneficiaries of the schemes administered by ComSuper.

In its pilot phase the system acted as a telephone call diversion service to pre-selected operational areas, and as an out of hours message service. Later stages of development during 1994-95 will include direct dial facilities to obtain equity information, and a general expansion of the service.

Human Resource Management

The Corporate and Staff Development Unit of the Human Resource Management Section continues to play a key role in the development of staff and information sharing throughout ComSuper. Although it historically concentrated on satisfying our corporate and business training needs, it is now also involved in administering the on-going technical training

requirements of Comsuper’s Information Technology staff.

The Modernisation Project naturally carries a significant training impact and consequently, the unit is heavily involved in meeting this demand. The unit has also taken a major role in administering the delivery of technical training associated with modernisation.

A large element of the computer redevelopment involves a move into a Windows environment for our desktop applications. The unit has been temporarily expanded to provide high quality in-house training and post-implementation support for staff in the use of the range of Windows based applications introduced.

28 Commonwealth Superannuation Administration

With the many changed activities and restructuring which is occuring within the organisation, ComSupser found itself in dispute with the Commonwealth Public Service Union (CPSU).

This dispute resulted in several appearances before the Industrial Relations Commission (Commissioner Smith), the first appearance being on 20 May 1994.

The outcome of the appearances was a recommendation by Commissioner Smith for ComSuper and the CPSU to negotiate all the matters before the parties in the context of agency bargaining.

Negotiations towards an agency agreement are still continuing. However, progress to date has been slow.

Business Operations

This branch carries the primary responsibility for administering the operational aspects of the superannuation schemes. The functions involve the maintenance of contributor and pensioner records, including the recording, against individual member records, of contributions received and benefits paid.

Civilian Member Services

During the year a number of major exercises were undertaken by the Civilian Member Services (CMS) section. The more notable of these were:

• PSS Transfer Value In Project - Since the introduction of the PSS in 1990, ComSuper had relied on manual systems to receive and record payment of Transfer Values, paid by members in respect of superannuation moneys from other schemes, to the PSS. This had caused a number of problems, including audit qualifications (due to the inability of

ComSuper’s ageing computer system’s inability to record the transfer values on member records which meant that the funds, although available to members in the event of their exiting the scheme, had to be recorded in an account for ‘unidentified’ moneys) and the inability, without significant manual intervention, to include transfer value data on members annual information statements.

To overcome these problems, ComSuper decided during the early part of 1994 to record on member records all Transfer Value In payments, paid into the PSS since 1 July 1990.

After thorough investigation of the options, the project began in late April 1994. A task force of nine staff was established with responsibility to:

• identify and retrieve all files where a PSS Transfer Value In payment had been made;

• identify and remove postings to the ‘unidentified moneys account’ which related to transfer values to the PSS;

• re-enter PSS Transfer Value In data, including bulk postings, to individual member records; and

• specify mainframe programming requirements to correctly calculate tax on the transfer value components and also calculate the amount of the transfer multiple purchased by the transfer values.

The Task Force was wound up in early July 1994, having managed to meet all deadlines with limited resources and tight time constraints. More than 7000 contributor records

29

30 Commonwealth Superannuation Administration

were updated and transfer multiples calculated prior to the preparation of the 1994 Information Statements. With the exception of approximately 1200 transferees who paid transfer values between July 1993 and February 1994, (under the rules of the scheme, their final transfer multiple could not be determined until the transfer value had been in the scheme for 12 months) all members had their transfer value amounts included in their

1994 Information Statements. At the same time, the amount held as ‘unidentified’ was reduced by correctly recording member transfer values by approximately $23 million.

• Confidential Medical and Personal Statement (CMAPS) - When the PSS was introduced in July 1990, the requirement for new scheme members to undergo a full medical examination on entry. The cost, to ComSuper, of these examinations was of the order of $0.5 million per year.

In June 1993, the rules of the PSS were amended to allow for an alternative method of assessing the benefit status of new entrants to the scheme. From 18 October 1993, medical examinations for new scheme members ceased, pending consideration of an alternative method of assessment. In December 1993, the Minister approved new arrangements.

Under the new arrangements, new members of the PSS are required to complete a comprehensive medical questionnaire (CMAPS) and send it direct to ComSuper within 14 days of joining the scheme. In the case of temporary or casual employees electing to join the scheme, the form must be sent to ComSuper within 14 days of electing to join the

PSS.

The completed forms are examined by a delegate of the Trustees who, on the basis of the information provided by the member, generally determines the member’s benefit status in the scheme. In a small number of cases the delgate requires additional medical informantion to determine the member’s PSS medical status. New scheme entrants may be required to attend a medical examination or, where the member has already had a medical examination for employment purposes, ComSuper seeks the member’s authority to have access to that report to avoid the need for a further medical examination.

The new arrangements are less intrusive for the bulk of new members as they are no longer required to undergo a full medical examination and the number of questions asked has been reduced from 76 to 38. The new procedure maintains protection against liability

for members entering the scheme with serious pre-existing medical conditions and has also resulted in significant reduction of administrative costs to ComSuper. The cost of medical examinations in 1994-95 is expected to be of the order of $50 000.

• Statement of Termination Payment (STP) - In conjunction with changes to improve services to our military clients, a project to streamline provision of STPs to our civilian clients was completed during the year.

The outcome of this project was that from 1 July 1994, the Civilian Member Services Section would be able to provide exiting members with STPs at the same time as they received advice of their benefits. The benefit to retiring members is that they will have their STP and full details of their benefits by the time they receive their cheques. This avoids delays in ‘rolling over’ their moneys into a roll-over fund.

Business Operations Branch 31

• On-line Diagnostics - As superannuation information is received from the personnel sections of agencies, a number of edits are run to detect errors in the data supplied. Until October 1993, these error messages, locally termed ‘diagnostics’, were generated in paper form, totalling some 12 000 diagnostics per fortnight.

From October 1993, a new system was introduced which generated the diagnostics ‘on­ line’. This allowed for faster correction of the errors and provided a monitoring system to identify agencies which were experiencing particular problems, thus allowing training to be offered in the areas of difficulty to reduce the number of errors being reported.

As a result of this new initiative, the backlog of diagnostics awaiting correction has been reduced significantly, leading to improvements in the quality of information provided to the membership.

The improved database quality will place ComSuper in a better position for transfer of data to its new membership system in 1995.

During the year, management information techniques were refined to provide line managers with more accurate and timely information. Attention has been focussed on turnaround time for benefit payments, the use of benchmarking to assess operational performance and productivity and improved measures to ensure constant work flows.

Business Analysts

During the year a Business Analysts group was established to provide the business requirements for the modernisation of ComSuper’s computer systems. The group contains experts on the business operations of ComSuper and is well placed to provide specifications for the new superannuation administration system arising out of the modernisation of ComSuper’s computer systems.

Retirement, Preservation and Military Member Services

A number of changes were made during the year both to the structure of the group involved in the processing of benefits for members exiting the Defence Force and to the procedures for processing member benefits. These changes were introduced following a comprehensive review of the core process.

Essentially, the group involved in payments is now operating under a much Hatter structure and non-core processing functions have been relocated to a special casework group. This has lead to greater productivity in terms of benefit applications processed per staff member per day. A further goal is to increase the percentage of benefits that are paid within a given timeframe after exit. It has been possible to pay 95% of benefits within 13 working days after exit providing all necessary information has been received from the member and the employer. Efforts will be made during the coming year to achieve 90% of payments within eight working days.

32 Commonwealth Superannuation Administration

Procedural changes have also resulted in further improvements to the level of service provided to clients. The most important such change resulted in ’Statement of Termination Payments’ being produced and provided to exiting members with their advice of benefit entitlement. These statements must be provided to members before they can roll-over a payment to a roll-over institution. Previously it was taking up to two weeks after they had received their cheque for members to receive their statement.

In order to make further gains, following the review of the processing group, mechanisms were put in place to ensure that there is an on-going focus on continuous improvement.

A core process review was also commenced for the pensioner services group and, whilst the report had not been completed by 30 June 1994, a number of changes had been implemented. One of these involved a reduction in the stages required for processing of a large proportion of the pensioner variations that are received.

During 1993-94 there were 36 446 variations submitted by pensioners, advising changes to bank accounts, addresses or changed taxation details. This represents, on average, one variation for every four pensioners.

An Interactive Voice Response (IVR) system, which was introduced in ComSuper in March 1994, also had an impact on the work of the pensioner services group. The introduction of this system is discussed at page 26 of this report. From 1 July 1994 the IVR system will operate through an 013 service. This will mean that clients using the service will be charged the cost of a local call regardless of where in Australia the call originates.

Business Systems

This branch provides the information technology services for ComSuper and plays a major role in the ComSuper transformation process.

Ongoing

ComSuper’s principal computer platform is currently the Department of Finance Amdahl mainframe, for which no direct charge is made. The notional cost of this ‘free’ service is $3 million per annum, though the marginal additional cost to the Department of Finance in providing the service to ComSuper has been estimated to be less than $1 million.

A Local Area Network (LAN) provides office support facilities to all staff of the agency.

During 1993-94, an average of 78 ComSuper staff were directly employed in providing IT services at a salary cost of $3.2 million. Consultants providing specialist IT services cost a further $0.1 million. Other resources included:

• hardware purchases and maintenance costs — $484 000;

• software purchases and maintenance costs — $266 000;

• consumables — $62 000; and

• other costs, e.g. data communications, training and data conversion — $167 000.

IT Modernisation

The computerised systems utilised by ComSuper for scheme administration were developed in the 1970s and have since been progressively modified to meet the changing needs of the Office brought about by legislative changes, the introduction of new superannuation schemes lor Commonwealth Government employees and members of the Defence Force and substantial changes occurring in the wider superannuation industry.

As a result of the need to introduce new superannuation schemes at short notice, existing computer systems were modified to accommodate the changes. This resulted in the new schemes inheriting the shortcomings of the old system which has led to the Auditor-General qualifying his reports on the financial statements of the Boards of Trustees and ComSuper

from 1992-93 to the present. The main area of concern of the Auditor-General has been ComSuper’s inability to separately account for the financial transactions on behalf of the CSS and PSS Boards of Trustees.

In an endeavour to address these problems, evaluations of ComSuper’s client service delivery arrangements and agency level strategic planning were undertaken in 1992. The studies

33

concluded that the information technology systems and infrastructure supporting the civilian schemes were inadequate for meeting compliance obligations, for the support of competitive service levels and for adjusting to the pace of change in the superannuation industry.

34 Commonwealth Superannuation Administration

Using the information gathered in the evaluations, ComSuper prepared a business case for the modernisation of the existing computer systems. The submission, put to an Acquisition Council, was supported by that body and ultimately endorsed by Government. Funding lor the project was approved in the context of the 1993-94 Budget.

The IT Modernisation Project was commenced in February 1994 when contracts were signed between ComSuper and the selected systems integrator, BHP IT. The project comprises five key elements designed to support ComSuper’s goals for meeting statutory obligations and

developing competitive service levels. The five elements are:

• the replacement, by early 1995-96, of civilian schemes membership administration systems which have now reached the end of their economic life and which severely limit the agency’s ability to meet statutory service level obligations;

• the consideration of the feasibility of redeveloping the Benefits Control System (BCS);

• the replacement, during 1994-95, of fragmented systems and technology platforms with an integrated data base and network which will provide a foundation for the development of more competitive service levels;

• the acquisition, during 1994-95, of modern IT development tools to enable IT to deliver the systems needed to meet statutory obligations and to place the Office in a position to deliver the type of enhanced service levels now expected of modern scheme administrators; and

• the enhancement of management decision making by the development of management information systems over a period commencing in 1994-95.

The capital cost of the IT Modernisation project is expected to be about $10 million, of which $8.3 million is the cost of the systems integration contract with BHP IT with the balance being made up largely of ComSuper salaries. Expenditure on the project is expected to occur as follows:

Contract costs Salaries

1993- 94 $2.7 million $0.4 million 1994- 95 $4.8 million $1.0 million 1995- 96 $0.8 million $0.3 million

At the close of 1993-94, the report of the BCS feasibility study had been tabled and its recommendations accepted. Consequently, it is expected that early in 1994-95, the scope of the IT Modernisation project will be extended to provide for the development of an integrated Superannuation Administration System (SAS) incorporating the functionality of the BCS and

Membership systems.

Business Management

The Business Management Branch was established in the latter part of 1992-93 with the specific charter to develop and implement the Office’s long term business objectives; which are to transform ComSuper into a commercially sustainable superannuation business. By

commercially sustainable we mean that ComSuper’s operations will become more business oriented, providing administrative services, the cost and standard of which (through appropriate benchmarking) will be demonstrated to be comparable to those found generally in the private sector.

During 1993-94 the new Branch continued to refine its structure as new functions were added and new business imperatives and business opportunities identified. The primary focus of the Branch continues to be:

• to develop the business accounting facilities and capacities of ComSuper in order to:

- service the increasingly complex accounting requirements of four of Australia’s largest occupation superannuation schemes;

- service the financial and accounting requirements of three Boards of Trustees and to comply with the accounting requirements imposed by external supervisory agencies;

- restructure ComSuper’s funding base to achieve greater financial flexibility;

- administer cost recovery arrangements consistent with the 1989 Cabinet decision requiring ComSuper to recover a proportional share of the costs of administering the CSS from certain Government Business enterprises.

• to foster and develop a business approach to ComSuper’s capacity and reputation as an administrator of occupational superannuation schemes. This is to be achieved through:

- focussing resource allocation decisions on expected business outcomes;

- establishing the true costs of administration through activity based costing methods;

- establishment of accounting systems and procedures to support this new focus.

• to facilitate ComSuper’s continuous improvement objectives through fostering of the adoption of a philosophy of Total Quality Management and through application of measures for Quality Assurance, Risk Management and for benchmarking against best practice.

• to provide effective resource management advice and services and to contribute towards the development and maintenance of an effective and appropriate working environment.

35

To meet its new responsibilities the branch has been structured into four discrete functions.

Business Accounting

Comprising the existing Finance and Accounts Section which pursues the following broad objectives:

• to develop, maintain and refine the corporate financial strategy and plan for meeting ComSuper’s financial obligations during the pay-back period for the IT Modernisation project and beyond;

• to provide professional financial and accounting services to the Boards of Trustees in relation to the financial and investment activities of three of Australia’s largest occupational superannuation schemes (the CSS, PSS and MSBS);

• to develop and implement a strategy aimed at reducing the impact of current inadequate computer systems on the level of qualification of annual financial statements in a timeframe which will enable Boards’ annual reports to be tabled in Parliament within legislative time limits;

• to assist in the development, within ComSuper, of a corporate management approach, consistent with government initiatives for financial management improvement, including program budgeting, accrual accounting and general management issues;

• to develop management information systems which help establish priorities, monitor achievement of objectives and provide indicators of performance, especially in relation to resource management;

• to coordinate the preparation of annual estimates of program resources, liaise with outside agencies regarding those resources and monitor program resource usage;

• to develop and apply efficient cash-management principles; and

• to provide accountancy services for ComSuper.

Efficient delivery of ComSuper’s programs requires a framework of financial planning, coordination, monitoring and control. The Business Accounting function provides that framework through the pursuit of sound resource-management practices. This involves the development and implementation of appropriate management and financial information systems, the provision of financial services and the monitoring and review of resource usage.

Business Liaison

36 Commonwealth Superannuation Administration

This is a newly established unit with responsibility for the pursuit of the following objectives:

•to continue to develop a long term strategy for the implementation of the Office’s business objectives;

•to initiate and foster co-operative business relationships with employer clients (with initial concentration on existing GBE clients currently subject to user-pays);

Business Management Branch 37

• to provide high quality advice to ComSuper and Boards of Trustees on industry issues and external legislation [such as the Superannuation Industry (Supervision) Act) which have implications for the administration of superannuation schemes;

•to expand the scope for generating additional revenue through:

- exploration of appropriate business opportunities including the development of business relationships with appropriate potential joint venture partners;

- negotiation of facilities for revenue retention through the operation of ComSuper’s Resource Agreement with the Department of Finance under section 35 of the Audit Act; and

- pursuit of opportunities for effective use of Corporate sponsorship and paid advertising;

• to expand the use of Service Level Agreements with employer clients;

• to expand the use of EXPO Australia wide;

• to explore opportunities to expand the range of products and services provided to existing clients;

• develop, implement and monitor ComSuper’s fraud control strategy and plan; and

• monitor delivery of service levels and costs against those contained in service level agreements.

Quality Manayement

This section was established in February 1994 and carries primary responsibility to:

• promote and introduce quality management and quality assurance concepts and techniques across ComSuper during the next three years leading to a continuous improvement mode of operation for the organisation;

• facilitate the introduction of continuous improvement programs;

• develop and oversight a comprehensive ComSuper-wide Risk Management Program for the transformation process;

• provide a quality assurance and risk management service to ComSuper senior management in respect of the IT Modernisation project;

• develop a strategy for the implementation of an effective Management Information System; and

• continue to develop and refine ComSuper’s benchmarking activities with a view to the identification of best practice and the development of activity based costing systems.

38 Commonwealth Superannuation Administration

Properly and Services

This is a large group with responsibility for the management and control of ComSuper’s accommodation, workplace safety, physical security, registry and office services functions. For 1993-94, this group pursued the following broad objectives:

• the development and implementation of an energy conservation strategy;

• to complete the development of ComSuper’s purchasing procedures and promulgate them in the form of the Chief Executive Officer’s directions;

• to negotiate a Resource Agreement with the Department of Finance, covering the lease on ComSuper’s current accommodation arrangements and the incorporation of Property Operating Expenses into Running Costs;

• completion of the office refurbishment program;

• renegotiation of the lease on the Cameron Offices;

• development of an accommodation plan for ComSuper for the term of the renegotiated accommodation lease, having regard to financial obligations which flow from the resource agreement covering the IT Modernisation project;

• development of a long-term accommodation strategy for ComSuper; and

• transfer of the recording of physical assets to the FINEST accounting system in a form suited to the accrual accounting needs of the Office.

In recognition of the growing workloads in the areas of financial administration and business development, responsibility for the Office’s Human Resource Management function was transferred to the newly established Client Communications Branch during February 1994.

More detail about the operations of the Branch may be found under Program 3 : Delivery of Corporate Services.

Program performance

Program 1: Delivery of occupational superannuation schemes for Commonwealth Government employees

Description

Program 1 provides administrative support to the Commissioner for Superannuation in the general administration of the CSS and the PNG superannuation schemes. It also provides the administrative structure to assist the Commonwealth Superannuation Board of Trustees No. 1 with the administration of the PSS Scheme.

The CSS Act (and Regulations) provide a comprehensive occupational superannuation scheme for Commonwealth Government employees, statutory officers and employees of statutory authorities to which the Act and Regulations apply. The scheme was closed to new

contributors from 1 July 1990 when the PSS was introduced. The Superannuation Act 1922 provides the continuing authority for the payment of pensions to, or in respect of, persons who were pensioners on 30 June 1976, certain persons whose pensions under the 1922 Act ceased before 30 June 1976 and persons with deferred benefit entitlements.

The Superannuation Act 1990 (PSS Act)(and Regulations) provides that the PSS Scheme shall be administered by the Commonwealth Superannuation Board of Trustees No. 1. Administrative support is provided by the Commissioner for Superannuation and staff of ComSuper.

The PNG superannuation schemes, the authority for which comes mainly from regulations under the Papua New Guinea (Staffing Assistance) Act 1973, are closed schemes and provide pensions for former expatriate employees in PNG and their surviving spouses and children.

Full descriptions on the operation of the various schemes can be found in the relevant annual reports prepared for the schemes - Report by the Commissioner for Superannuation on the administration of the CSS (Part A of this report), Report by the Commonwealth Superannuation Board of Trustees No.2. in respect of that Board’s limited responsibilities in

relation to the CSS, Report by the Commonwealth Superannuation Board of Trustees No.l. in respect of the operation of the PSS and the report of the Commissioner for Superannuation on the activities of the PNG schemes.

The following commentary in relation to program performance refers to the administrative activities undertaken by ComSuper in assisting the Commissioner for Superannuation and the civilian schemes Boards of Trustees in fulfilling their legislative obligations.

39

40 Program 1. Delivery o f occupational superannuation schemes

Table 6. Significant statistics of the civilian superannuation schemes

CSS PSS PNG

Contributors in force at 30 June

Males 69 037 45 441

Females 31 953 58 700

Total 100 990 104 141

Total contributions received $292.7m $280.4m

Contributor exits during year

Age 1 376 229

R etrenchm ent 5 047 2 636

Invalidity 206 72

D eath 151 55

Resignation and other 1 805 4 689

Transfers to other schemes 1 604 nil

Total 10 189 7 681

Pensions in force at 30 June

Age 40 551 179 258

Invalidity 29 934 140 63

Retrenchm ent 7 036 255 -

Spouses and orphans 25 831 126 232

Total 103 352 700 553

Annual pension liability $ 1 628.8m $8.4m $16. lrn

Average yearly adult pension $ 15 975 $13 293 $29 203

D eferred benefits in force at 30 June 5 167

Number of benefits deferred during year 526

The aim is to administer the program through the establishment and maintenance of high- quality computer systems and administrative procedures within ComSuper. The program comprises two sub-programs:

1.1 Primary Administration; and

1.2 Reconsideration and Review.

All branches of ComSuper contribute, in varying degrees, to the operation of the program but the prime responsibility rests with the Business Operations Branch.

Major activities

The critical activities under Program 1 are:

• the collection of contributions and payment of benefits;

• the recording of member contributions and determination of benefits;

Delivery o f occupational superannuation schemes 41

• the classification of contributors and pensioners;

• counselling of members and the provision of information;

• legislation matters; and

• reconsideration and review.

Resources

The costs of administering Program 1 are met through moneys appropriated from time to time by Parliament (that is, annual appropriations), unlike some private sector superannuation schemes in which administrative costs are charged against the earnings of the fund. These private sector schemes, as a general rule, are fully funded, and this also differentiates them from the Commonwealth schemes.

Funds for the payment of pensions and lump sum benefits are provided from two sources:

• the Superannuation Fund in respect of lump sum benefits payable when an eligible employee resigns, or dies without leaving dependants; and

• the Superannuation Acts Special Appropriation for the payment of items such as pensions and the employer-financed part of lump sum benefits on retirement.

The financial transactions for this program during 1993-94 are shown in table 7 below and also in the financial statements at appendix E. Staffing resources of the program are also shown in table 7 below.

Table 7. Financial and starting resources summary - Program 1: 1993-94

Actual 1992-93 $000

Budget (a) 1993-94 $000

Actual 1993-94 $000

Com ponents of A ppropriations Program costs (excluding running costs) 2 895 956 2 945 794 2 848 715

Running costs 7 812 7 576 6 829

Total A ppropriations 2 903 768 2 953 370 2 955 544

Less adjustm ents (1 956 912) (2 027 739) (1 933 911)

Total outlays 946 856 925 631 921 633

Total revenue (b) 112 408 32 067 37 984

Staff years 186.9 177.5 173.3

Note, (a) Budget figure amended to include Additional Estimates. (b) See Budget Paper 1 for a description of items included in revenue.

Social Justice

ComSuper continues with activities designed to make both members and employing agencies aware of the importance of superannuation as part of the conditions of service and remuneration package of Commonwealth employees. The emphasis this year was on training

42 Program 1. Delivery o f occupational superannuation schemes

for Personnel Staff of agencies to ensure that a higher standard of reporting to ComSuper by personnel staff is achieved.

This type of training will become subject to greater targeting during 1994-95 to identify both those scheme rules and procedures requiring greater emphasis to promote understanding, and those agencies requiring more assistance after assessment of their reporting performance.

Program 1 Sub-program 1

Primary Administration

Description

The activities of this program component comprise:

• collection of contributions and payment of benefits;

• recording of contributions and determination of benefits;

• assessment of requests for invalidity retirement certificates;

• counselling and information; and

• legislation matters.

The main objectives of ComSuper in carrying out the above activities are to achieve accuracy and timeliness. Accuracy in the collection and recording of contributions, in the determination of benefits due to members, and in the information provided to members. Timeliness in the payment of contributions received to the relevant fund and in the

determination and payment of benefits to members.

The financial transactions for, and staffing resources of, this program component during 1993-94 are shown in table 8 below.

Table 8. Financial and staffing resources summary - Program component 1.1: 1993-94

Actual 1992-93 $000

Budget (a) 1993-94 $000

Actual 1993-94 $000

Components of A ppropriations Program costs (excluding running costs) 2 895 922 2 945 759 2 848 629

Running costs 7 066 6 611 5 920

Total A ppropriations 2 902 988 2 952 370 2 854 549

Less adjustm ents (1 956 912) (2 027 739) (1 933 911)

Total outlays 946 076 924 631 920 638

Total revenue (b) 112 408 32 067 37 984

Staff years 168.6 154.8 151.1

Note, (a) Budget figure amended to include Additional Estimates. (b) See Budget Paper 1 for a description of items included in revenue.

Issues confronted during 1993-94

The major issues confronted within this subprogram during the year were:

• database inadequacies; and

43

44 Program 1. Delivery o f occupational superannuation schemes

• undertaking a range of strategic projects to identify measures to improve performance and enhance client focus.

Collection of contributions and payment of benefits

Superannuation contributions of members of the CSS and productivity contributions made by employers of those members are included in the superannuation fund established under the 1976 Act and form part of the Commonwealth Public Account. Revised legislative requirements, effective from 1 July 1994, remove those moneys held in the CSS Fund from the Commonwealth Public Account. Superannuation contributions of members of the PSS and productivity contributions made by employers of those members are included in the superannuation fund established under the 1990 Act. The PSS Fund does not form part of the Commonwealth Public Account.

Debtors

As at 30 June 1994, an amount of $714 625 remained outstanding in respect of overpaid benefits. When such overpayments occur, the Commissioner is obligated to initiate recovery procedures but may, in cases of financial hardship, waive the imposition of interest where repayments are effected by instalment or may waive the Commonwealth’s right to recover the full amount of the overpayment. (Details of amounts waived or written off are given in the financial statements at appendix E.)

The procedures adopted by ComSuper to recover debts are in accordance with government policy (as expressed in the Finance Directions) and legal opinion given by the Attorney- General’s Department.

The most frequent cause of overpayments is the delayed notification of a member’s death with resultant overpayment to the estate or spouse. Such instances were greatly reduced with the introduction, last year, of legislative amendments which enabled the spouses of deceased pensioners to receive six fortnightly payments at the higher member rate of benefit before reverting to the lower spouses’ rate.

Recording of contributions and determination of benefits

A major ongoing task of ComSuper is the maintenance and correction of contributor information held on computer files. This program ensures the integrity of the information used for the calculation of future benefit entitlements, estimates of future entitlements and the provision of annual members’ information statements. The membership data used to update the computer files are provided by employers in the form of fortnightly variation

returns. These returns provide basic details on contributors, reasons for adjustments to contributions, salary and actual amounts of contributions deducted.

Piimaiy administration 45

The major components ol the maintenance program are:

• Correction exercises — Computer edits identify and produce error messages for any incorrect or incomplete information provided in the variation returns. These errors are investigated and corrected on an ongoing basis.

• Data validation exercises — These are conducted using computer programs which identify common types of errors and missing or incomplete data.

The amount of corrective action required depends entirely on the adherence by employers to the procedures and instructions regarding the collection and reporting of contribution variations. The standard reporting procedures are outlined in the ComSuper Superannuation Manual and in superannuation circulars that have been issued to all employers.

To further assist employers, ComSuper is currently updating a procedures manual for the CSS and originating a similar manual for the PSS scheme. These manuals will be available ‘on-line’ to those employers participating in ComSuper’s EXPO project. More information about this project is provided on pages 72-73.

A program evaluation conducted during 1992-93 highlighted two critical factors:

1. the ComSuper membership database exhibits an unacceptably high error level; and

2. the computer systems have outlived their technical and business usefulness.

These findings were the major force behind the decision to seek approval to restructure the Office’s computer systems, approval for which was granted during 1992-93.

Maintenance of pensioner records

During the year significant resources were directed towards the maintenance and adjustment of pension records. This entailed changes to postal addresses, bank details, taxation information and method of payment. Pensioners advise ComSuper of these changes either in writing or through the free call (008) telephone service.

The (008) service was available to all superannuation pensioners at no cost to enable them to contact ComSuper and advise changes of address or financial institution or make inquiries regarding taxation deductions or non-receipt of pension payments.

Client services were reviewed during the year, in conjunction with the introduction of the IVR telephone service, and, as a result, a decision was taken to replace the existing 008 free call service, from 1 July 1994, with a Customnet One Three service.

This new service will result in callers being charged for the cost of a local call fee, from anywhere in Australia, with the balance of the call charge being met by ComSuper. This change will result in minor savings for the Office with no diminution of the facilities being offered to our clients.

Invalidity retirement

Members of either the CSS or the PSS may not be retired on the grounds of invalidity unless the relevant Board of Trustees has certified in writing that, if so retired, the officer will be entitled to invalidity benefits.

Before approving retirement, the Trustees must consider a recommendation from an assessment panel as to whether the employee is totally and permanently incapacitated. Total and permanent incapacity means the person is unlikely to work again in a position for which he or she is reasonably qualified by education, training and experience or could become so qualified after retraining. The recommendation on whether the person is totally and permanently incapacitated is provided by a private sector invalidity assessment panel. This service is now provided by Disability Claims Management and Counselling Service (DCMC) whose staff have expertise in the assessment of invalidity claims for superannuation purposes.

Before approving invalidity retirement, the trustees are also required to consider whether it is practicable for the person to find employment, or to be appointed to an office, for which the person is reasonably qualified according to the criteria for total and permanent incapacity.

Pre-assessment payments

The invalidity retirement process also has a system of ‘pre-assessment payments’. These payments are intended to ensure that a person (not in receipt of compensation payments) who is, or likely to become, totally and permanently incapacitated is not left without income during the period of assessment of his or her case.

During 1993— 94 pre-assessment payment applications for the CSS and PSS (combined) were received from 220 applicants. Of these, 211 were approved, while nine were refused because they did not satisfy the eligibility criteria. Fifty one of the applicants were in receipt of compensation payments so did not qualify for pre-assessment payments.

Invalidity Retirement Certificates

During the year 308 applications lor invalidity retirement were received and 309 (which included cases from the previous year) were finalised. Of the cases finalised, the Trustees approved 243 and refused 41. A further 25 cases either lapsed or were withdrawn by the applicant.

The Trustees also approved eight invalidity retirements without reference to the panel. In these cases the respective Boards were satisfied that the person was totally and permanently incapacitated.

Further details of decisions taken in 1993-94 on pre-assessment payments and invalidity retirement certificates are reported in the Boards’ annual reports.

Depending on the member’s medical condition, the Commissioner will require periodic review of the member’s state of health and earnings. When the member’s health is sufficiently restored or when the member’s pension plus personal earnings exceed a

46 Program 1. Delivery o f occupational superannuation schemes

Primary administration 47

prescribed limit, there is provision to suspend pension. This suspension can be partial or total. The reviews can continue until the member reaches age 65 and if health is restored the Commissioner will seek to have the member re-employed by the pre-retirement employer.

Partial invalidity payments

As mentioned in Part A (page 11) of this report, members who remain employed, but in a lower classification and at a reduced salary level because of a mental or physical impairment, may be entitled to receive a partial invalidity pension to compensate for the reduction in

earnings. During the year a total of 33 partial invalidity pensions were granted to such members.

Counselling and information

Overall, a significant improvement in correspondence turnarounds was achieved during the year with some 81 per cent of all CSS and 74.8 per cent of all PSS correspondence being finalised within 14 working days. A summary of the types of inquiry handled during the year is shown in table 9 below.

Table 9. Categories of correspondence received: 1993-94

Type o f inquiry CSS PSS

Number % Number %

Redundancy 7 658 69.0 % 3 636 69.0 %

Age 1 577 14.0 % 429 8.0 %

Resignation 559 5.0 % 652 13.0 %

Legal Inquiries 517 4.6 % 297 5.6 %

O ther 841 7.4 % 247 4.4 %

Total processed 11 152 100 % 5 261 100 %

The impact of legal inquiries, almost exclusively in respect of family law matters, has resulted in the imposition of a Legal Service Fee, to offset the indirect costs of non-corc processing of such requests. Such fees, amounting to $ 11 629 (excluding withdrawn requests), were accounted for under ComSuper’s Section 35 Agreement with the Department

of Finance.

Continued improvements in client liaison activities, training for staff clerks and an expanded information seminar program were highlights of the year. The greatest emphasis on information seminars was involuntary retirement, at the request of departments and approved authorities, and monthly age seminars in Canberra for intending retirees.

A summary of types of presentation conducted, together with the number of clients (scheme members and/or agency personnel officers) is shown in table 10 below.

The most significant, in terms of volume, exercise during the year is the preparation and issue of the more than 230 000 annual member information statements to current members and preserved benefit members. An improvement in distribution was achieved, with

48 Program 1. Delivery o f occupational superannuation schemes

statements being issued to departments and approved authorities in late September 1993. The improvement was achieved,in part, as a consequence of the annual crediting rate being determined by the Boards of Trustees earlier than 1992.

Table 10. Information seminars conducted: 1993-94

Type of presentation Number held Number of attendees

CSS M em ber Information 96 2 355

PSS M em ber Inform ation 59 1 654

Personnel 93 1 294

Liaison 30 501

Interviews (Single & G roup) 26 62

Redundancy 41 1 510

Age R etirem ent Seminars 8 209

Retirem ent Interviews 66 71

Total 419 7 656

Bulk calculation and generation of statements was still not possible for:

• PSS casual members;

• members returning to the APS from approved authorities which maintain their own productivity superannuation schemes; and

• certain members with preserved benefits from previous periods of membership of the schemes.

The Schemes Promotion Group, which is responsible for the production of major ComSuper communications such as newsletters, information books and leaflets, forms and annual reports of the Commissioner, the Boards of Trustees, Authority and ComSuper, was able to satisfy all of the scheduling timeframes imposed by Parliament, ComSuper operational areas and employer and employee members.

Legislation matters

Specific activities of the program include:

• providing advice on the implications of proposed legislative changes;

• the preparation of circulars on legislative changes for distribution to departments and authorities;

• representing the Commissioner during the development, drafting and consideration of superannuation Bills and Regulations as well as assessing and commenting on draft superannuation and associated legislation;

• coordinating the preparation of instruments for the delegation of the superannuation Boards of Trustees’ powers and the Commissioner’s powers under the superannuation legislation to authorised officers of ComSuper, departments and authorities;

• preparing submissions to the Boards of Trustees on policy matters: and

• preparing informative responses to representations from Members of Parliament, the Ombudsman’s office and staff associations.

Program 1 Sub-program 2

Reconsideration and review

Description

This subprogram is an adjunct to the administration of the schemes and involves internal reconsideration and external review of decisions made by the two civilian Boards of Trustees, the Commissioner and their delegates. More information is reported in the respective annual reports of the CSS and PSS Boards.

The financial transactions for, and staffing resources of, this program component during 1993-94 are shown in table 11 below.

Table 11. Financial and staffing resources summary - Program component 1.2: 1993-94

Actual Budget (a) Actual

1992-93 1993-94 1993-94

$000 $000 $000

Components of A ppropriations Program costs (excluding running costs) 34 35 86

R unning costs 746 965 909

Total A ppropriations 780 1 000 995

Less adjustm ents na na na

Total outlays Total revenue (b)

780 1 000 995

Staff years 18.3 22.7 22.2

Note, (a) Budget figure amended to include Additional Estimates. (b) See Budget Paper 1 for a description of items included in revenue.

Operation

This subprogram has two components:

• internal reconsideration; and

• external review.

Internal reconsideration

People affected by, and dissatisfied with, a decision made by the civilian Boards, the Commissioner or their respective delegates, can ask for a matter to be reconsidered. In practice nearly all decisions taken in the course of administering the schemes can be subject to reconsideration.

49

50 Program 1. Delivery o f occupational superannuation schemes

During the year, 139 requests for reconsideration of decisions of the Commissioner or his delegates under the 1976 Act were received and 186 finalised. There were 231 requests carried forward from the previous year. Detailed information is reported in Part A at page 11. The largest category of decisions giving rise to requests was that of decisions not to allow members to make late elections to preserve rights accruing from earlier periods of CSS membership (81 new requests).

Requests for reconsideration of decisions made by the Commonwealth Superannuation Board of Trustees No. 1 (PSS Board) totalled 59, while 21 requests were received in relation to decisions made by the Commonwealth Superannuation Board of Trustees No. 2 (CSS Board). When combined with the requests relating to decisions of the Commissioner (or his delegates), the total number received was 219. Altogether, 333 requests were carried forward from 1992-93 and 284 were finalised this reporting year.

During the year a small cell was established to concentrate on those older cases that remained outstanding. Although nominated target times were still not being met in all instances, this initiative, together with refinement of existing procedures, resulted in a reduction in overall processing times by some ten per cent. Revised procedures, such as the greater use of computer generated documentation, resulted in significant cost reductions. A saving of some 28 per cent in the average cost of reconsidering decisions was realised when compared to costs incurred during the previous year. This outcome compares favourably to other, similar, public sector superannuation schemes benchmarked.

External review

Under the 1976 Act, once a matter has been reconsidered, there is provision for further appeal. This involves appeals to the AAT. Similar provisions exist for appeal of decisions made under the DFRDB Act. Activities relating to AAT matters are shown at page 13 in Part A of this report.

Under the provisions of the 1990 Act the only avenue of external appeal to the Federal Court is in relation to a question of law.

Issues confronted.

The main issues confronted in this subprogram were those associated with:

• handling the continuing high number of cases relating to late elections;

• maintaining high standards of administrative review in a cost effective manner; and

• briefing the three Boards of Trustees on implications and obligations arising under the Superannuation Industry (Supervision) Act 1993 and associated legislation.

Program 2: Delivery of Defence Force schemes

Description

This program comprises two subprograms:

2.1 Primary Administration; and

2.2 Reconsideration and Review.

Program 2 provides administrative support to the DFRDB Authority and the MSB Board.

The Authority is responsible to the Minister for Defence and also the Minister for Defence Science and Personnel for the general administration of the Defence Force Retirement and Death Benefits Act 1973 (the DFRDB Act) and the Defence Forces Retirement Benefits A d 1948 (the DFRB Act). The Commissioner for Superannuation is ex officio chairman of the

DFRDB Authority (he has delegated this role to the Assistant Commissioner Review and Legal Branch).

Table 12. Significant statistics of the Defence Force superannuation schemes

DFRB / DFRDB MSBS

Contributors in force at 30 June

Males 23 432 29 178

Females 1 171 6 119

Total 24 603 35 297

Total contributions received $54.6m $107.9

Contributor exits during year

R etirem ent 1 482 115

Invalidity 48 390

Redundancy - 923

Death 20 25

Resignation and other 608 4 730

Total 2 158 6 183

Pensions in force at 30 June

Age 36 999 211

Invalidity 2 961 312

Spouses and orphans 5 019 17

Redundancy - 1 610

Total 44 979 2 150

Annual pension liability $ 658m $ 18.7m

Average yearly adult pension $ 14 786 $ 8 706

51

52 Program 2. Delivery o f defence force schemes

This program is also concerned with the administration of the Military Superannuation and Benefits Scheme (MSBS) which came into operation on 1 October 1991. The MSB Board operates under the provisions of a Trust Deed and Rules.

Major activities

The critical activities are the recording of contributions, payment of superannuation benefits, invalidity assessments and review procedures.

Resources

Funds for the payment of pensions and lump sum benefits under the DFRDB Act arc provided from the DFRDB and DFRB Special Appropriation which is held by the Department of Defence. Contributions by DFRDB members are paid into revenue item ‘Superannuation (DFRDB) payments by members and transfer values received’ which is held by the Department of Defence. Details of payments made from the Special Appropriation and of amounts collected are provided in Table 1 on page 1 of the Defence Force Retirement and Death Benefits Authority Annual Report 1993-94.

The MSBS employer benefits are funded from Consolidated Revenue, while member benefits are funded from the MSB Fund. The Retention Benefit is funded from Consolidated Revenue and administered by the Department of Defence. The productivity contributions are also paid into the MSB Fund by the Department of Defence.

The financial transactions for this program during 1993-94 are shown in table 13 below and also in the financial statements at appendix E. Staffing resources of the program are also shown in table 13 below.

Table 13. Financial and stalling resources summary - Program 2: 1993-94

A c tu a l B udget (a) A c tu a l

1 9 9 2 -9 3 1 9 9 3 -9 4 1 9 9 3 -9 4

$000 $000 $000

Components of A ppropriations Program costs (excluding running costs) 5 5 7

Running costs 2 925 2 968 2 798

Total A ppropriations 2 930 2 973 2 805

L e s s adjustments na (411 847) (397 498)

Total outlays 2 930 (408 874) (394 693)

Total revenue (b) na na na

Staff years 77.9 72.3 70.6

Note, (a) Budget figure amended to include A dditional Estimates. (b) See Budget Paper 1 for a description of items included in revenue.

Delivery o f defence force schemes 53

Social justice

No groups have been identified as experiencing cultural, linguistic, racial or religious barriers preventing equitable access to ComSuper program delivery. In terms of service delivery, an extensive counselling service, seminars and (008) telephone facilities are provided to ensure members have access to information about their entitlements and the schemes.

When dealing with requests for reconsideration, ComSuper provides detailed information in writing to the member concerned, including copies of the reasons for making the particular decisions affecting the member and information outlining the member’s appeal options.

In terms of service delivery, an extensive information service, attendance at resettlement seminars, and improved telephone facilities (including access to the ComSuper IVR telephone service), are provided to ensure members have access to information about their entitlements and schemes.

Program 2 Sub-program 1

Primary administration

Description

Primary administration involves:

• collection of contributions and payment of benefits;

• the recording of contributions and determination of benefits;

• medical aspects of invalidity retirement and review of invalidity pensioners;

• provision of information to and counselling of scheme members; and

• provision of advice on legislative matters relating to the schemes administered

Operations

The administration details for the military schemes (that is, MSBS and the DFRDB incorporating the DFRB) are reported separately in the annual reports of the Military Superannuation and Benefits Board of Trustees No. 1 and the DFRDB Authority.

Resources

The financial transactions for, and staffing resources of on, this program component during 1993-94 are shown in table 14.

Table 14. Financial and staffing resources summary - Program 2.1: 1993-94

Actual 1992-93 $000

Budget (a) 1993-94 $000

Actual 1993-94 $000

Com ponents of A ppropriations Program costs (excluding running costs) na na na

Running costs 2 519 2 802 2 650

Total A ppropriations 2 519 2 802 2 650

Less adjustm ents na (411 847) (397 498)

Total outlays 2 519 (409 045) (394 848)

Total revenue (b) na na na

Staff years 67.5 68.9 67.3

Note, (a) Budget figure amended to include Additional Estimates. (b) See Budget Paper 1 for a description of items included in revenue.

55

56 Program 2. Delivery o f defence force schemes

Issues confronted

The incidence of retrenchments from the Defence Force continued during the year. ComSuper liaises closely with the Department of Defence to ensure that resourcing is appropriate and arrangements are in place to enable prompt processing of benefits when these retrenchment exercises occur.

DFRDB activities

In terms of the schemes administered by ComSuper, DFRDB contributions are unique. Member contributions are paid directly into Consolidated Revenue, not a fund. Similarly, benefits are paid from Consolidated Revenue.

Membership of the DFRDB scheme, at 30 June 1994, consisted of 24 603 contributors and 44 979 pensioners.

The DFRDB scheme provides pension benefits only upon ‘retirement’, death of a member where there are eligible dependants and invalidity retirement (Classes A and B but not C). ‘Retirement’ in the DFRDB can be upon completion of 20 years’ service or at retiring age for rank (e.g. for general duties, retiring age for rank of a Major is age 47).

The number of on-going pensions payable to DFRDB members rose during the year from 43 646 at 30 June 1993 to 44 979 at 30 June 1994, an increase of three per cent. Of this total number, 4373 pensions were being paid to spouses of former members and 646 were being paid to children and orphans.

Of the 2158 members who exited the scheme during 1993— 94, a total of 1776 elected to commute part of their pension entitlement, while 589 received refunds of contributions in the form of a lump sum payment. A further 12 invalidity retirees, who were classified Class C on retirement, were only entitled to receive a lump sum payment.

At 30 June 1994, there were 2961 former members in receipt of invalidity benefits. The classification of 49 retirees was determined during the year, which resulted in 23 being classified Class A, 14 classified Class B and 12 classified Class C.

During the year, 924 invalidity cases were examined with a view to possible reclassification under the terms of the DFRDB Act. This compares to 729 reviews in the previous year. Of the 161 classifications changed, 73 were increased and 88 were reduced.

Counselling activities during the year involved the issue of 3086 retirement advice letters, 10 200 telephone inquiries and 41 personal counselling sessions. Presentations were also given at 24 resettlement seminars and six presentations were given to service personnel and recruitment officers. Approximately 4916 people attended the seminars.

Primary administration 57

MSBS activities

I) The MSBS funding arrangements operate differently from those of the DFRDB scheme. The primary difference is that member contributions are paid into the MSB Fund in contrast to j the member contributions in the DFRDB scheme which are paid into Consolidated Revenue. Only the employer component of the MSBS benefits is paid from Consolidated Revenue.

In terms of member profile, the MSBS, like the PSS, is characterised by a relatively young membership and correspondingly lower average salary when compared to its predecessor. As at 30 June 1994 there were 35 297 contributors to the MSBS.

The MSBS benefits differ quite markedly from those of the civilian schemes. For example, the MSBS, like the DFRDB, provides three categories for invalidity entitlements. Depending on the circumstances there is a potential pension payable under each category.

The number of on-going pensions payable to MSBS members rose sharply during the year from 1025 at 30 June 1993 to 2150 at 30 June 1994, an increase of 109 per cent.

Of the 6183 members who exited the scheme during 1993-94, a total of 4852 had a preserved employer benefit. This brings the total number of preserved employer benefits to 10 704, compared to 6090 at 30 June 1993.

Invalidity classifications were determined in respect of 312 former contributors, resulting in 84 being classified Class A, 106 being classified Class B and 148 being classified Class C.

Reviews were carried out on forty (three in 1992-93) invalidity pensioners with a view to possible reclassification under the terms of the MSBS Rules, resulting in seven classifications being changed, five being increased and two being decreased.

Counselling activities involved the issue of 3772 retirement advice letters, 6800 telephone inquiries and 27 personal counselling sessions. Presentations were also given at 24 resettlement seminars and six presentations were given to service personnel and recruitment officers. Approximately 4916 people attended the seminars.

1

Program 2 Sub-program 2

Reconsideration and review

Description

As for the civilian schemes, reconsideration and review for the Defence Force schemes involves responding to requests for internal reconsideration and for external review. Principally these functions relate to assessment of individual member’s medical fitness for civilian employment after discharge on medical grounds from the Defence Force. The military schemes differ quite substantially from the civilian schemes in their invalidity provisions. The military schemes are characterised by three categories of invalidity (A, B and C). Each category entitles the member to a different benefit, category A being the most favourable benefit. There are mechanisms in the military schemes to review and vary a member’s invalidity classification.

Resources

The financial transactions for, and staffing resources of, this program component during 1993-94 are shown in table 15 below.

Table 15. Financial and staffing resources summary - Program 2.2: 1993-94

Actual 1992-93 $000

Budget (a) 1993-94 $000

Actual 1993-94 $000

Components of A ppropriations Program costs (excluding running costs) 5 5 7

Running costs 406 166 148

Total A ppropriations 411 171 155

Less adjustm ents na na na

Total outlays 411 171 155

Total revenue (b) na na na

Staff years 10.4 3.4 3.3

Note, (a) Budget figure amended to include Additional Estimates. (b) See Budget Paper 1 for a description of items included in revenue.

Operations

DFRDB

The DFRDB Authority has delegated most of its primary decision-making powers but reserved its power of reconsideration. Many of the primary decisions are taken by delegates after consideration by the Committee of Alternates. Some 79 per cent of all requests for

59

60 Program 2. Delivery o f defence force schemes

reconsideration relate to invalidity matters; these represent 12 per cent of the decisions which could have given rise to reconsideration requests.

Internal

During 1993-94, 66 requests for reconsideration were received and 40 brought forward from last year. The outcomes were as follows:

• 29 decisions confirmed;

• 18 were varied in favour of the applicant; and

• two were withdrawn and three lapsed.

Fifty four requests were under investigation as at 30 June 1994.

External

During 1993-94, 19 applications were made to the AAT and 16 were carried over from the previous year. Outcomes for the 17 applications resolved during the year were as follows:

• Five decisions were affirmed;

• Seven applications were decided by the AAT in favour of the applicants (two of these were varied without the AAT proceeding to hearing on account of additional evidence produced by the individual applicants during the preliminary stages of the cases);

• Three cases were dismissed by the AAT following withdrawal of the applications; and

• the AAT had no jurisdiction in a further two matters because one decision in question had not been reconsidered by the Authority and the other was not a rcvicwablc decision.

There were 18 cases receiving attention at 30 June 1994.

During the year, one appeal was lodged with the Federal COurt against a decision of the AAT affirming the Authority’s decision concerning the applicant’s invalidity classification.

Most of the cases decided by the AAT during the year dealt with classification and reclassification of members of the Defence Force who have been retired on medical grounds due to some physical or mental incapacity to perform their duties.

For purposes of determining the percentage of incapacity in relation to civil employment, the DFRDB Act provides that the Authority shall have regard to the kinds of civil employment the person might reasonably undertake, as well as the degree to which the member’s medical condition has diminished his capacity to undertake those types of employment. When considering the matter the Authority shall have regard to the member’s identified skills, qualifications and experience.

Reconsideration and review 61

In Buck v Defence Force Retirement and Death Benefits Authority No. S92/299 of 15 October 1993 the Tribunal, presided over by a Presidential Member, was asked to consider the question of whether, in determining a person’s capacity to undertake employment, it was permissible to have regard to whether he or she would have difficulty in obtaining employment because a certain medical condition would be considered a compensation risk. There had been a conflict of authority in relation to this question by the Tribunal. Previously, in Re Shelton 2 ALD 574, it was held that this was a relevant matter for consideration, but a differently constituted Tribunal in Re Conway 2 ALN 510 held that the legislation did not permit this to be taken into account. The Tribunal in Re Buck held that capacity to undertake employment could not include considerations of difficulty in obtaining employment. In coming to this conclusion, the Tribunal applied the decision of the Full Federal Court in Defence Force Retirement and Death Benefits Authority v House 22 FCR 138. It follows that in determining the extent of a person’s capacity to undertake employment it will only be permissible to have regard to a person’s ability to secure employment by reason of his or her

physical or mental impairment and not by reason of the attitude of prospective employers.

MSBS

Internal

The procedure for reconsideration of matters in the MSBS differs from DFRDB scheme procedures. Under the MSBS a case officer will prepare an agendum and detail the reasons for making a particular decision. This is then considered by the Reconsideration Advisory Committee (RAC) which will notify the member of the recommendation it proposes to make to the MSB Board and offer the member the opportunity to respond. The member’s response, the agendum and the RAC recommendation are submitted to the MSBS Board for decision. Once the Board has made its determination the member is advised with full particulars, including the Board minute dealing with the member’s request for reconsideration.

A total of 26 requests for reconsideration were carried forward from last year while 17 were received during the year relating to decisions made by delegates of the MSB Board. Of the 17 cases, 16 concerned entitlement to spouses’ benefit. Nineteen requests were resolved, leaving 24 on hand as at 30 June 1994. There were no requests for reconsideration related to MSB Board decisions.

External

Under the provisions of the MSBS the only external appeal lies to the Federal Court on a question of law. There were no appeals to the Federal Court during the year.

Program 3: Delivery of corporate services

Description

Program 3 maintains the broad infrastructure within which the two primary programs operate and also provides a pool of common expertise and services to support these programs. This includes the senior executive staff, quality management, computer systems support, finance and accounts, personnel services, staff development, office support, records management, corporate support, secretariat support and freedom of information.

Major activities

Program 3 consists of one sub-program (Management of Resources), elements of which are spread across the entire organisational structure of ComSuper. Activities funded by the program include the following:

• Executive;

• Secretariat;

• Information Technology (including the IT Modernisation Project);

• Human Resource Management;

• Business Accounting;

• Business Liaison;

• Quality Management;

• Property and Services; and

• Corporate Support.

Issues confronted

Generally the issues confronted by this program are outlined in the comments on operational areas reported elsewhere in this report. The issues addressed by this program during the year were associated with the change in corporate culture, IT modernisation and the organisational restructure.

These fundamental issues were largely highlighted by the program evaluation concluded in November 1992 and redressed by the strategic goals adopted through the year and noted throughout this report.

Consolidation of the ComSuper reorganisation will continue during 1994-95.

63

64 P rogram 3. D elivery o f corporate services

Resources

The financial transactions for this program during 1993-94 are shown in table 16 below and also in the financial statements at appendix E. Staffing resources of the program arc also shown in table 16 below.

Table 16. Financial and starting resources summary - Program 3: 1993-94

A c tu a l 1 9 9 2 -9 3 $000

B u dget (a) 1 9 9 3 -9 4 $000

A c tu a l 1 9 9 3 -9 4 $000

Components of A ppropriations Program costs (excluding running costs) na 315 316

Running costs 15 367 17 829 17 467

Total A ppropriations 15 367 18 144 17 783

L e s s adjustm ents (11) (32) (43)

Total outlays 14 456 17 512 17 240

Total revenue (b) na na na

Staff years 237.2 228.9 223.4

Note, (a) Budget figure amended to include Additional Estimates. (b) See Budget Paper 1 for a description of items included in revenue.

Social Justice

Pertinent social justice remarks for this program are encompassed in the comments provided in respect of Programs 1 and 2.

Program performance

Information Technology

1993-94 was a period of immense change in the delivery of IT services to the agency. The commencement of the IT Modernisation project, the largest ever undertaking for ComSuper, required resources to be restructured and redirected from a predominantly maintenance mode to one of development and changing technology. These changes have been achieved while continuing to support existing systems on which ComSuper is dependent for the delivery of services to clients.

Information Technology activities during 1993-94 fall into the two broad classifications of support for existing systems, and new projects.

Systems support

In the mainframe environment the most significant events of the year have been the replacement of the IBM ES 9021/580 with the more powerful Amdahl 5995 1100A; and ComSuper’s successful participation in the off site test of the contingency plan for the Department of Finance computer installation.

Delivery o f coiporate services 65

The Local Area Network (LAN) functioned effectively throughout the year.

Development work on existing systems for the CSS and PSS schemes included:

• the recording of Confidential and Personal Medical Statement information;

• improvements to the payment of lump sum benefits;

• the provision of on-line facilities for the actioning of diagnostics from the contributions system;

• the recording of transfer values paid into PSS;

• improvements to the treatment of elections to transfer from CSS to PSS where the election was after 30 June 1991;

• improvements to the annual pension increase exercise to distribute group certificates in the same mail-out;

• extensions to the range of benefit calculations made by the computer system;

• the pilot EXPO project was concluded and the system developed to production status for use by agencies.

Development work on existing systems for the DFRDB and MSB schemes included:

• improvements to Reasonable Benefit Limit reporting;

• the development of a new release of the ready reckoner packages;

• the provision of scheme experience data to the Australian Government Actuary;

• improvements to tax calculation facilities;

• the recording and accounting for manually calculated benefits;

• improvements to exit benefit payment processes.

New projects

The background to the IT Modernisation project is described in the Business Systems Branch component of this report. The project involves the redevelopment of the CSS and PSS Contributions software and databases (the Membership system) from their existing mainframe platform onto a new open systems IT platform within ComSuper. In making this transfer of

platforms the Membership system will be completely restructured and its functionality improved in accordance with re-engineered business processes.

Rapid progress has been made in 1993-94. Following Cabinet approval for the project in June 1993 a draft Request For Tender (RFT) was released on 25 August 1993. Briefings were held and on receipt of IT Industry comment a final RFT was issued to the Systems

Integration Panel on 8 October 1993. The Tender Board and evaluation teams completed the evaluation of all ten responses on 15 December 1993. Subsequent contract negotiations led

66 Program 3. Delivery o f corporate services

to the signing of a contract, with a value of $8.3 million, with the successful tenderer, BHP Information Technology, on 11 March 1994. The Project formally commenced on 14 March 1994 and is scheduled to take some three years to complete. It is jointly managed by ComSuper and BHP IT, with both parties providing staff to integrated sub-project teams.

The Technical Infrastructure sub-project has seen a new LAN and desktop environment substantially installed. Training of staff and the installation of the production environment for the new Membership system will occur during 1994— 95.

The functional analysis and specification of the new Membership System is on schedule, with development and implementation planned for 1994-95. A Business Study, undertaken as part of the functional analysis, examined the need for the project to be extended to provide for the redevelopment and integration of the Benefits Control System. The recommendations of this study are being evaluated by ComSuper. A decision is expected in the early part of

1994-95.

Human Resource Management

Senior Executive staff movements: There were no SES staff movements in ComSuper during this period.

Other staff movements: A further senior officer was seconded to the Department of Finance during the period to provide the officer with an opportunity to develop policy skills.

Post-separation employment: No staff resigning or retiring from ComSuper are known to have been offered or accepted appointments with private agencies on the basis of their work experience with this Agency.

Graduate recruitment: Two graduates with legal qualifications were recruited through the Graduate Administrative Assistant (GAA) scheme during the 1993-94 period.

Performance pay: ComSuper continued to implement performance appraisal and pay during 1993-94 for its Senior Officer structure and equivalent classifications in accordance with the guidelines. In accordance with revised reporting guidelines, further details in relation to this issue are available upon request.

Reduction in staffing levels: The level of staffing at 30 June 1994, of 412 personnel, represents a reduction of 93 officers (18.4 per cent) over the same period last year. While such a significant drop in numbers should normally reflect in the level of service being provided, the reverse has been achieved, in that the level of productivity has actually been increased over the same period. This improvement has been achieved through continuous improvement activities where staff identify more streamlined processes.

Figure 7 below demonstrates the steady reduction in staff numbers during the year.

Delivery of coi]iorate seivices 67

Figure 7. ComSuper staffing levels 1993-94

520

5 1 0 i

500

490

480

440 -

430

420 -

410 -

6 7 8 2 3 4 9 10 11 12 13 14 15 16 17 18 19

Payday - 1993-94

Training guarantee: ComSuper’s training expenditure, recognised under the Training Guarantee Act of $710 593 exceeds the minimum level of $261 450 required under that Act (based on an annual payroll of $17.43 million).

Total training expenditure, including salaries of staff attending training activities, for the year amounted to $838 890, representing 4.8 per cent of ComSuper’s annual payroll. Excluding salary costs, training expenditure was $535 797 representing 3.1 per cent of the annual payroll.

These statistics vary considerably from those figures appearing in last year’s annual report. A review of the 1992-93 training figures revealed the cost of salaries of staff attending training were significantly overstated in that report.

During the 1992-93 financial year the total training expenditure was $764 660 (including salaries of staff attending training) which represented 4.37 per cent of the annual payroll for that year.

Excluding salaries of staff attending training, training expenditure for the 1992-93 year amounted to $434 630, representing 2.5 per cent of the annual payroll.

Tables 17 and 18 provide details of person days spent in formal training activities by the staff of ComSuper during 1993-94 and also those EEO target groups which participated in eligible training programs during the year.

68 Program 3. Delivery o f corporate services

Table 17. Person days spent by ComSuper personnel in formal training activities, 1993-94

Classification Males Females Total

Senior Executive 54.4 - 54.4

Senior Officer G rade B 44.6 10.4 55.0

Senior Officer G rade C 82.1 44.7 126.8

Administrative Service Officer G rade 6 83.8 137.6 221.4

Administrative Service Officer G rade 5 62.4 112.8 175.2

Administrative Service Officer G rade 4 68.5 119.5 188.0

Administrative Service Officer Class 3 75.7 197.0 272.7

Administrative Service Officer Class 2 129.2 123.0 252.2

Administrative Service Officer Class 1 20.0 27.5 47.5

Senior Inform ation Technology Officer G rade A 6.5 - 6.5

Senior Information Technology Officer G rade B 20.3 - 20.3

Senior Information Technology Officer G rade C 57.4 31.9 89.3

Information Technology Officer G rade 2 80.6 65.6 146.1

Information Technology Officer G rade 1 10.0 14.5 24.5

G raduate A dministrative Assistant 3.4 4.0 7.4

R esearch Officer G rade 1 0.4 - 0.4

Office Trainee 6.0 - 6.0

Total 8053 888.4 1693.7

Table 18. EEO target groups participating in formal training activities, 1993-94

C lassification * N E S B l N E S B 2 A T S I P W D

Senior Executive - -

Senior Officer 1 1 - 1

Administrative Service Officer 14 21 2 13

Senior Information Technology Officer 2 1 - 2

Information Technology Officer 6 3 - -

G raduate Administrative Assistant - - - -

Office Trainee - - - -

Total 23 26 2 16

* NESBl

NESB2 ATS! PWD

Non-English speaking background (First generation) Non-English speaking background (Second generation) Aboriginal and Torres Strait Islander Persons with disabilities

Business Accounting

The most pressing issue faced by ComSuper is that of overcoming the level of qualification placed by the Auditor-General on the financial statements of the Commissioner and the CSS and PSS Boards of Trustees. Although the Audit Office has expressed concerns about technical accounting matters, it should be noted that those concerns do not extend to individual member accumulations in the fund or their future entitlement to benefits. The factors which have given rise to the level of audit criticism have as much to do with the age of ComSuper’s computer systems as they do with the introduction of the new Public Sector Superannuation Scheme and changes generally occurring within the wider superannuation industry.

Delivery of corporate services 69

Because the financial transactions of the PSS for 1991-92 were combined with those of the CSS and were presented jointly in the financial statements of the CSS, the Auditor-General qualified both the PSS and CSS financial statements for that year. Following the separation of the assets and liabilities of the PSS and CSS, the Funds have been administered separately since 1 July 1992.

Commercial accounting practice would require the Board of Trustees to maintain separate accounts in respect of each scheme. During the course of 1992-93 the Auditor-General advised that once the assets of the two schemes were separated it would be necessary for the computer systems maintained by the scheme administrator to be amended to enable separate

accounts and records to be maintained for each scheme at individual member level. To the extent that this has not occurred, the Auditor-General has qualified the financial statements of the Commissioner and the CSS and PSS Boards of Trustees during the past two financial

years.

The computerised systems utilised by ComSuper for scheme administration were developed in the 1970s and have since been progressively modified to meet changing needs. Although these systems have serviced the accounting needs of the CSS well for many years, it became clear that with the introduction of new schemes for Commonwealth government employees

and as a result of the substantial changes occurring in the wider superannuation industry, a fundamental restructuring of ComSuper’s computer systems was necessary if the Office is to fulfil its statutory obligations and otherwise operate successfully in the superannuation environment of the 1990’s.

Following a detailed program evaluation and Acquisition Council process, the Government agreed to provide funding, commencing in the 1993-94 Budget, for the replacement and enhancement of ComSuper’s membership systems and other information technology systems to remove, inter alia, areas of ongoing audit criticism. This redevelopment project is an enormous undertaking and although the bulk of the detailed programming work will occur over the next three years the project will continue over the next eight. The Auditor-General

acknowledges and supports the need for this computer systems upgrade.

The problems identified by the Auditor-General in previous years in relation to the financial statements of the CSS and PSS Schemes and, in particular, the issue of separate recording of CSS and PSS contributions at individual member level, cannot be fully resolved until the major elements of the IT Modernisation Project (computer systems redevelopment) are

completed.

Although the financial statements will continue to be qualified, albeit in significantly reduced form, for this period, it is important to reiterate that the Auditor-General’s criticisms relate to technical accounting matters and those concerns do not impact in any material way on the integrity of individual member accumulations in each Fund or to their future entitlement to

benefits.

70 Program 3. Delivery o f corporate se/vices

However, interim strategies undertaken, in consultation with the Audit Office, arc in place to minimise the likelihood of future audit qualification. These strategies have included:

. the introduction of a new general ledger accounting package and the monthly maintenance of general ledgers;

. separate remittance of CSS and PSS contributions from agencies;

. notification to employers requesting that CSS and PSS employee contributions be reported separately at member level; and

. incorporating, in the IT Modernisation Project, the requirements for recording productivity contributions at individual member level.

Although we are currently unable to remove all areas of ongoing audit criticism, for the preparation of the 1993-94 financial statements a highly detailed and structured process for undertaking the work required for the purposes of audit, and for monitoring progress against set milestones, was initiated with the assistance of officers of the Australian National Audit

Office. This process was successful in overcoming a number of major areas of audit concern, such that for 1993-94 the level of audit qualification has been dramatically reduced. Indeed, it was pleasing to note that as a result of the work performed by ComSuper accounting staff to overcome the deficiencies in the existing computer systems, all but one area of qualification has been removed. Importantly, the qualification regarding the maintenance of proper accounts and records has been removed.

The one remaining area of qualification relates to the fact that some agencies continue to provide combined remittances for both the CSS and PSS and, as a result, there has been some unavoidable mixing of the moneys of the two Funds. Although the amounts involved are not material, it is the auditor’s view that any mixing of CSS Fund moneys and PSS Fund moneys constitutes a breach of the Superannuation Acts.

Of perhaps equal importance, the structure process employed during 1993-94 enabled the tasks of preparing and finalising the auditing of financial statements to be completed in a much reduced timeframe. Indeed the audit of the separate financial statements of ComSuper, the CSS and PSS Boards for 1993/94 were completed by the third week in September 1994, some three months ahead of the timeframe achieved for previous financial years. Although this in itself has been a significant achievement we expect that lor 1994-95 even further improvements to the timeliness of the process will be possible.

Industry Standards

In response to developments leading to the passage of the Superannuation Industry (Supervision) Act 1993, ComSuper established the Industry Standards Section. The Section monitors SIS developments in anticipation of the transition from OSSA that will occur during the 1994-95 financial year. The section monitors and provides senior management with detailed advice in relation to compliance with the requirements embodied in the SIS

Delivery o f corporate sendees 71

legislation which will have a large impact on the operations of the schemes administered by ComSuper. A range of other strategic tasks, relevant to general Office developments was also undertaken by this new section during the year.

Business Liaison

The Business Liaison Unit carries the prime responsibility for:

• fostering the development of a business approach to ComSuper’s capacity and reputation as an administrator of occupational superannuation schemes;

• developing a long-term strategy for the implementation of the office’s business objectives;

• initiating and fostering co-operative business relationships with employer clients (with initial concentration on existing GBE clients currently subject to user pays); and

• the development of more appropriate financial arrangements through expanded use of the flexibility available under existing Budget rules.

New Business Opportunities

A number of proposed business activities were examined by the Business Liaison Unit during the year and some remain under active consideration.

In order for ComSuper to offset the impact of the loss of clients to alternative employer sponsored schemes and to gain the benefits available from economies of scale, ComSuper is actively pursuing opportunities to expand, within the Commonwealth arena, the client base for which administrative services are provided. In line with this strategy, ComSuper is currently considering a number of business proposals which will provide scope for the Office to offer a wider suite of financial services and products to its existing client base.

Funding Arrangements

ComSuper has developed, in consultation with the Department of Finance, a funding base which provides additional flexibility and incentive for the rational use of resources. This has been achieved through expanded use of the financial flexibilities available under the Budget rules but specifically through the negotiation of a more flexible arrangement under Section

35 of the Audit Act for revenue generation and retention.

User Pavs

During 1993-94 ComSuper recovered costs in the order of $7.9 million from employers subject to user pays arrangements. It is anticipated that a slightly lesser amount will be recovered in respect of the 1994-95 financial year. The forecast reduction has been occasioned by the privatisation of some of the government agencies previously required to meet their share of the costs incurred by ComSuper in administering the CSS on behalf of their employees, combined with the effect of maintaining administrative costs at the 1993-94 levels.

72 Program 3. Delivery o f corporate services

The methodology of costing services provided is the subject of continuing review and improvement. Enhancement of computer systems will result in a more precise methodology being developed in the coming year through application of activity-based costing methods.

Similarly, when new computer systems are implemented ComSuper administration costs will reduce considerably due to in-built efficiencies within the new system and through the process of continuous improvement. Further savings that are achievable through participation of agencies in EXPO will be passed on to those clients.

ComSuper has adopted, to a limited degree, a program of cost recovery for the provision of services which fall outside the scope of ComSuper’s normal budget appropriation. In this regard employers who wish to undertake large retrenchment exercises in reduced timeframes will be expected to meet the additional costs incurred by ComSuper in responding to their needs. Similarly legal practitioners seeking client information will be charged a small administrative fee for services provided, and costs associated with the provision of ready reckoner software to members of the financial advisory industry will be recovered.

Fraud Control

During 1993-94 the Business Liaison Unit continued to provide a centralised fraud control service to ComSuper. Activities included the conduct of a limited client survey as a pro­ active fraud counter measure. Some 1500 clients were surveyed resulting in the detection of 34 cases of suspected ineligible payment of entitlements. Although some cases are the subject of continuing investigation, no cases of suspected fraud were detected. Of those cases where ineligibility to the payment was suspected, a large proportion of these resulted in the identification of overpaid pension benefits and action initiated to recover the amounts involved.

As reported in last years annual report two significant cases of suspected fraud were referred to the Commonwealth’s law enforcement bodies with legal proceedings implemented. In one case the suspect was convicted of defrauding the Commonwealth and in the second the suspect, who had admitted guilt, died before the case could be prosecuted.

Other fraud control measures undertaken during the year included the revision of the existing Fraud Control Plan and risk analysis (which was submitted to the Attorney-General’s Department), revision of detection procedures leading to improved and more sophisticated detection and tracing techniques being implemented, and management acceptance of a planned staff awareness program.

EXPO

With the view to improving service and communications between personnel units in Departments and Agencies ComSuper has developed a new software product which we believe to be a major step forward in the area of superannuation administration. This new product we have named ‘EXPO’ - short for External Access for Personnel Officers.

Delivery o f corporate services 73

Superannuation is a complex business and with the increase in service wide retrenchment activity there is even more pressure on personnel staff and ComSuper to provide prompt service and accurate advice on benefit applications. One of the major problems experienced in the processing of benefits relates to the delay introduced into the process as a result of the provision of incomplete or inaccurate data. The consequent need to resolve these deficiencies before a benefit can be processed creates added workloads in personnel units and ComSuper.

It also creates dissatisfaction on the part of the departmental employee affected by the delay.

EXPO will allow personnel staff to directly transmit, by electronic means, members applications on-line to ComSuper’s benefit processing system.

The program assists personnel staff to provide complete and accurate information to ComSuper. It also provides a facility for personnel staff to inquire about the progress and status of individual benefit applications and allows ComSuper to transmit directly to personnel units information such as the procedures manual, updates to procedures, ‘Super News’, Superannuation circulars, ready reckoner updates and provides an electronic mail facility for direct communication between personnel staff and action officers in ComSuper.

The program was pilot tested within nine ACT agencies during 1993 with excellent results. Personnel staff involved in the pilot project reported that EXPO increased their efficiency and helped build a better relationship with their employees and with ComSuper.

The program was formally launched in November 1993 and has since been actively marketed to Commonwealth Departments and Agencies Australia wide. Use of the product attracts a nominal annual licence fee for each personnel ‘site’ which is connected to the system. This fee covers the cost of new software, installation, IT backup and servicing costs within

ComSuper. This fee also covers the cost of all new software releases which will be added to EXPO as the product develops.

The response to the product has been excellent with almost sixty (60) users now connected to the system and another fifty (50) or more active inquiries from Departments and agencies seeking access to the system.

Future enhancements to the product are expected to include:

• a Network Version - seen as a natural extension of the existing PC based product.

• Mainframe access - possible access to contributions data to enable users to check the balance of records and to produce final benefit quotes for retirees.

• Superannuation forms listings - listing all standard superannuation forms and where they can be obtained.

• Shift Allowance Calculator - enabling personnel staff to automatically calculate contribution rates for shift workers.

• ComSuper Circulars - direct access to all superannuation circulars.

74 Program 3. Delivery o f corporate seivices

• Paperless Operation - replacing hard copy transmissions of data by direct electronic data transfer.

• ComSuper based training - providing training modules for personnel staff involved in the processing and administration of superannuation.

Quality Management

Quality Management (TQM) is a management philosophy that focuses all resources on providing a product or service that satisfies clients.

ComSuper established, in February 1994, the Quality Management Section to oversight the adoption of a management philosophy geared towards:

• promotion and implementation of quality management and quality assurance leading to the adoption of a continuous improvement model of operation in ComSuper;

• through quality management and quality assurance programs, assist ComSuper to be in a highly competitive position within three years;

• to provide the central co-ordination role for implementation of the Office’s quality management, quality assurance and continuous improvement goals;

• to foster amongst the staff of ComSuper an understanding of the need for quality and to set and monitor their own quality standards in the critical business functions; and

• to continuously monitor performance and establish, through benchmarking and best practice, ComSuper as a leader in the superannuation administration industry.

The introduction of quality management and implementation of continuous improvement throughout ComSuper will be achieved by way of education, the provision of a number of seminars and training programs and by selected specific projects.

Although the Quality Management Section was only established in February 1994, by the end of the year a total of 70 ComSuper staff members had undertaken TQM training. In addition, a number of Core Process Redesign Reviews and Continuous Improvement projects were initiated during the year. These included:

• a draft Quality Policy has been prepared and was, at 30 June, being considered by senior management prior to release for comment by ComSuper staff.

In broad terms, the policy will state ComSuper’s commitment to provide a consistent, reliable and dependable standards of service that meet client needs at a competitive cost.

Under the terms of the policy, Branches and Sections will be required to incorporate objectives for improved quality in their strategic plans. Those plans are to be implemented and progress to be objectively audited, measured and reported.

• A project to reduce absenteeism, which was commenced within the Human Resources Section during the year, was transferred to the Quality Management Section following its establishment in February.

The results of the project have been highly significant, achieving a reduction of 16.5 per cent in absenteeism over the financial year.

Central to the philosophy of quality management is the measurement of performance. The section has been involved in the development of a management information system for ComSuper which is to be implemented by June 1995. As at 30 June 1994, significant progress on prototyping had been achieved.

ComSuper is moving in new directions and focusing on new initiatives through the pursuit of its Transformation objectives. With the first and perhaps most critical stage of that transformation well under way, ComSuper is aware that there are risks associated with the change and has introduced a program for risk management.

The risk management program is being coordinated by the Quality Management Section. However, the responsibility for managing risk associated with each sub-component of the project remains with the responsible project, or line, manager.

The aim of the risk management program is to identify and quantify areas of uncertainty which could have a detrimental effect on the achievement of project objectives and to determine ways in which significant risks can be eliminated or mitigated to a controllable level.

In keeping with its new business focus ComSuper now actively compares its cost structures and service levels with those found generally within the wider superannuation industry. This represents a major shift to commercial style practices and competitiveness with evaluation of performance being undertaken at every stage of the business operation to ensure that best practice is enshrined at all levels.

Benchmarking is the strategic tool that has been chosen by ComSuper for assessing the direction and speed in which the Office must travel in order to remain competitive within the superannuation community.

In keeping with many public sector organisations, benchmarking represented a major challenge to ComSuper in that its costing systems were previously geared to meeting Government budgetary requirements. An activity based costing system, performance

indicators and productivity measures all had to be introduced before benchmarking could be contemplated. The paucity of information also extended to non-financial indicators like turnaround times, quality of service, customer satisfaction and other issues of

accountability.

The process of preparing for benchmarking has already paid substantial dividends by giving visibility to processes and procedures which require close examination. In the process of making visible the procedures and measurements, substantial dividends were realised even before benchmarking got off the ground.

Armed with vastly improved management information, one of ComSuper’s earliest initiatives was to undertake a comprehensive internal benchmarking program covering the

Delivery o f corporate services 75

76 Program 3. Delivery o f corporate services

four superannuation schemes it administers. This, together with valuable information gained through external benchmarking exchanges, has led to a rolling program of ‘core process’ redesign.

Property and Services

The Property and Services group is responsible for the management and control of ComSuper’s accommodation, safety, physical security, the provision of consumables - stores and stationery, the procurement and maintenance of Office machines, and the provision of Corporate Registry services.

During the year the Office Management Unit in consultation with the building owner, Australian Estate Management, undertook a program of significant refurbishment to that part of the Cameron Offices complex occupied by ComSuper. Cameron offices was constructed some 20 years ago and is now in need of refurbishment to improve both safety and the general work environment for staff.

A number of operational areas within ComSuper are accommodated in ‘systems furniture’ which, although practical did not make the best use of available office space in its existing configuration. This fact, combined with the significant restructuring of the operational areas of the Office which occurred during 1993-94, necessitated a re-look at the way in which the existing systems furniture was being used. In consultation with management and staff, systems furniture was reconfigured to meet organisational needs resulting in an improved working environment for staff, achieving accommodation efficiencies and generally creating an aesthetically improved environment.

Negotiations were commenced during the year with the Department of Finance on the development of a Resource Agreement covering ComSuper’s accommodation usage. At the same time negotiations have been conducted with the building owner (Australian Estate Management - AEM) on the review of the existing lease agreement between AEM and ComSuper.

Corporate Support

During the 1993-94 financial year many corporate support functions were devolved to operational areas of the office including the total decommissioning of the typing pool and data entry facilities.

Some devolution of accounting functions, to operational areas has already occurred, and in keeping with the Office’s ‘one-slop-shop’ philosophy in the delivery of client service, further opportunities for devolution are to be actively pursued during 1994-95. At the same time opportunity for the further devolution of traditional ‘corporate services’ functions will be explored as part of the business re-engineering activities which are now widespread throughout the organisation.

appendixes

- '->3

1 || 1|| 1

Appendix A

Freedom of Information Act statement

This statement is provided in accordance with section 8 of the Freedom o f Information Act 1982 (the FOI Act).

Functions of ComSuper

The general functions of ComSuper are described in Part B, pages 17-38 of this report.

Decision-making powers

The Commissioner for Superannuation’s power to administer the provisions of the Superannuation Act 1976 is set out in section 17 of that Act and the power of the Commissioner to delegate those powers and functions is set out in section 25. The application of those powers is outlined under Part A of this report.

The power of the DFRDB Authority to administer the provisions of the Defence Forces Retirement Benefits Act 1948 and the Defence Force Retirement and Death Benefits Act 1973 is set out in section 8 of the DFRDB Act. The power of the authority to delegate its powers and functions is set out in section 15. The application of those powers is summarised under

program 2 of this report, while the details are published separately in the Defence Force Retirement and Death Benefits Authority Annual Report 1992-93.

FOI internal procedures

All requests for documents are referred to the FOI Coordinator. Compliance with the application fee provisions of the FOI Act are verified and the request is registered and acknowledged. The documents are then obtained and the request is considered by the staff

of the FOI Unit.

Decisions to grant access and levy charges and limited powers to refuse access are made by the FOI Coordinator (Administrative Service Officer Class 5), while those refusing access are made by either the Administrative Service Officer, Class 6, External Liaison, or the Assistant Commissioner, Client Communications Branch (Senior Executive, Band 1).

Requests for internal review of FOI decisions are also referred to the FOI Coordinator. They are then forwarded to the Review and Legal Services Branch where they are investigated prior to submission to the Commissioner for decision under section 54 of the FOI Act. Officers currently designated to carry out such investigations are Senior Officers Grade B of the Review and Legal Services Branch. All decisions on internal reviews are made by the Commissioner personally.

79

80 Appendix A

Facilities fo r access

Facilities for viewing documents are provided only at the ComSuper office in Canberra as ComSuper has no regional offices. Publications may be inspected at ComSuper’s FOI Unit and copies, for which there may be a charge, can be obtained by writing to the address shown below. Information about facilities for access by people with disabilities can be obtained by contacting the FOI coordinator at the address and telephone numbers shown on page 82.

Consultative arrangements

Informal and ad hoc arrangements exist whereby the national, State and Territory branches of the Superannuated Commonwealth Officers’ Association and those unions whose members are covered by the CSS and the PSS may make representations relating to the general administration of the schemes. Representations are also received which relate to the determination of individual contributor’s benefit entitlements.

Requests for consultations and/or representations relating to policy aspects of the schemes and their underlying legislation are referred to the Social Security Division of the Department of Finance which has responsibility for advising the Minister for Finance on such matters.

Categories o f documents

The Commissioner maintains no categories of documents that are open to public access as part of a public register or otherwise, in accordance with an enactment other than the FOI Act, where that access is subject to a fee or other charge.

The Commissioner’s annual report is the only category of document available for purchase by the public in accordance with arrangements made by the agency.

Leaflets that describe, in general terms, various aspects of the superannuation schemes arc the only categories of documents made available to the public free of charge upon request, other than under the FOI Act.

Other ComSuper leaflets (which incorporate an appropriate application form) are provided to personnel areas for issue to interested employees. A full list of leaflet titles is available from the Schemes Promotions Group, telephone (06) 252 6597.

Circulars describing various aspects of the superannuation schemes administered include:

• Commissioner for Superannuation Circulars — providing guidance in routine administrative matters to departments and authorities covered by the provisions of the Superannuation Act 1976; •

• Commissioner for Superannuation Circular Memoranda— providing guidance in routine administrative matters to departments, authorities and trustees of Approved Deposit Funds and other rollover institutions covered by the provisions of the Superannuation Act 1976; and

Freedom o f infoimation 81

• Retirement Benefits Office Superannuation Circulars — providing guidance in routine administrative matters to departments and authorities covered by the Superannuation Act 1976 and the Superannuation Act 1990.

A complete list of the circulars issued during the year is available from the Scheme Promotions Group (telephone (06) 252 6597). These circulars are prepared in three forms to accommodate the varying employer categories. The three categories of circular are:

A. agencies with staff participating in both the PSS and CSS with ComSuper administering the productivity scheme for both PSS and CSS members;

B. agencies with staff in the CSS but not the PSS with ComSuper administering the productivity scheme for CSS members; and

C. agencies with staff in the CSS but not the PSS with the employer administering the productivity scheme for CSS members.

Other categories of documents maintained by the Commissioner include:

• documents maintained as separate records of decision-making machinery such as superannuation monthly management reports;

• general correspondence and associated categories of documents according to subject matter;

• documents relating to specific functions of the agency such as contributor histories and benefit applications;

• documents associated with the internal administration and management of ComSuper such as those relating to staff and management services;

• policy-related documents including, for example: - the ComSuper Corporate Plan; - ComSuper Administrative Circulars (which provide advice on administrative and procedural arrangements for staff); - personnel policies, guidelines and procedures manuals; and

• statistical tables relating to the schemes administered (available from the Scheme Promotions Group (06) 252 6888).

Substantial information is also kept on ComSuper computer databases.

82 Appendix A

Resources

A total of 1.7 staff years was required to deal with FOI matters during the year and direct, non-staff costs totalled $2027. Direct staff costs represented an approximate outlay of $57 008. The average cost of processing FOI requests for the year amounted to $322.60 per

request.

Application fees totalling $30 were collected in respect of requests for access. Application fees totalling $5460 were remitted pursuant to section 30A of the FOI Act.

Performance of the FOI Unit

A total of 183 requests for access to documents were received during the year. The outcomes of these requests were:

• 181 granted in full; • One withdrawn; and • One outstanding.

There were no requests received to amend personal records (section 48), no requests for internal review under section 54 and there were no appeals lodged with the AAT under Part VI of the FOI Act.

FOI inquiries and initial contact point

Inquiries concerning access to documents or other matters relating to FOI should be directed to the FOI Contact Officer at ComSuper in Canberra. The postal and street addresses are:

The FOI Coordinator ComSuper Unit 1, Cameron Offices Chandler Street Belconnen ACT 2617

or

ComSuper PO Box 22 Belconnen ACT 2616

Telephone: (06) 252 7446 Facsimile: (06) 253 1116

Appendix B

Occupational Health and Safety

A ComSuper Health and Safety Committee was established in November 1992 and comprises three employee-elected health and safety representatives and two management representatives.

The Health and Safety Committee assists ComSuper management in the development of health and safety policies and procedures, facilitates cooperation with employees, develops , reviews and disseminates Occupational Health and Safety (OH&S) codes of practice and information to staff.

The Committee met on four occasions during the year.

During the year the Committee increased staff awareness of OH&S issues through the publication of articles in ComSuper staff bulletins and the provision of OH&S information at internal training courses.

ComSuper received 33 notifications of accidents during the year. Thirteen of these notifications resulted in compensation claims being lodged in the following categories:

Work related 10

Sport related 1

Journey related 2

There were no claims estimated to be over $10 000

Four return to work programs have been undertaken.

No directions were issued under section 45, 46 or 47 of the Occupational Health & Safely Act 1991 (OH&S Act) however, one request for an inspection of the workplace, was lodged in accordance with section 30 (l)(b)(i)of the Act. One dangerous accident/occurrence, which required notification under section 68 of the Occupational Health & Safely (Commonwealth

Employment) Act 1991 occurred and one direction/notice was lodged under that Act.

Screen-based eye testing program

Seventy seven officers were tested under ComSuper’s screen-based eye testing program during 1993-94 at a cost of $2800. Spectacles were recommend for seventeen officers.

Health initiatives taken during 1993—94

During the year, ComSuper put in place an Employee Assistance Program (EAP) utilising the services of EASACT Pty Ltd. The program is designed to enable staff to access counselling services as and when required.

83

Appendix C

industrial Democracy

The material for this section is provided in accordance with subsection 22C(10A) of the Public Service Act 1922.

Status and philosophy o f Industrial Democracy Policy

ComSuper’s ID policy is an agreed management— union document which was finalised in December 1985. It concentrates on:

• involving staff in decision-making processes which affect their workplace;

• providing a forum for consultation on and discussion of issues;

• fostering understanding between management and staff;

• facilitating the exchange of information;

• improving staff development opportunities; and

• maintaining harmonious industrial relations.

During the year the ComSuper Consultative Council established a working party to examine the ID policy and report back on recommendations for any changes. At the close of the financial year, a draft revised ID policy was with the PSU lor comment.

Consultative mechanisms

The formal mechanism for consultation in ComSuper is the Consultative Council. This body consists of four management and four union representatives who meet at irregular intervals to consider various issues, share information, and, as far as possible, resolve issues.

Informal liaison occurs regularly with union representatives at both workplace and branch office level on matters of mutual interest.

Client comments

ComSuper has no formal complaints monitoring system at present. Complaints are generally handled on an ad hoc basis within the respective areas generating them. However, strategic projects have been initiated, as part of ComSuper’s renewed client focus, that will consider the need for formal complaint-handling procedures and recommend structures commensurate with that need. Statistics compiled during the program evaluation suggest that the complaint level is less than one per cent. Similar results were obtained during a three month monitoring of incoming correspondence. These results are based solely on the quantity of complaints,

that is, there was no evaluative assessment of complaint validity.

85

Appendix D

ComSuper staffing information Table Dl. Operative staff as at 30 June 1994

Males Females Total

Commissioner * 1 1

Deputy Commissioner 1 1

Sub-total 2 2

Review and Legal Services Branch: A ssistant Commissioner 1 1

Superannuation Reconsideration 6 6 12

Legislation and Military Schemes Review 4 3 7

External A ppeals and Advising 5 3 8

Sub-total 16 12 28

Client Communications Branch: A ssistant Commissioner 1 1

Secretariat and Invalidity Assessment Section 11 22 33

Schemes Prom otion 5 2 7

M em ber and Employer Communication 15 13 28

H um an R esource Management 8 10 18

Sub-total 40 47 87

Business Operations Branch: A ssistant Commissioner 1 1

R etirem ent, Preservation & M ilitary M em ber Services 25 24 49

Civilian M em ber Services 33 59 92

Systems Training and Procedures 1 4 5

Sub-total 60 87 147

Business Systems Branch: A ssistant Commissioner 1 1

Ongoing Office and G eneral Applications 4 2 6

Civilian Applications Section 4 2 6

Military Applications 3 3 6

Planning and Policy 7 10 17

Technical Services 7 4 11

IT M odernisation 13 9 22

Sub-total 39 30 69

Business Management Branch: Assistant Commissioner 1 1

Quality Management 2 2 4

Property and Services 21 16 37

Finance and Accounts 15 16 31

Business Liaison 4 2 6

Sub-total 43 36 79

Total 200 212 412

* D enotes non-Publtc Service Act staff. All o ther staff are employed under the Public Service Act 1922.

87

88 Appendix D

Table D2. Operative staff: by classification and gender as at 30 June 1994

Classification Males Females Total

Senior Executive Band 3 1 _ 1

Senior Executive Band 2 1 - 1

Senior Executive Band 1 5 - 5

Total Senior Executive Seivice 7 - 7

Senior Officer G rade B 11 2 13

Senior O fficer G rade C 22 8 30

Administrative Service Officer Class 6 28 29 57

Administrative Service Officer Class 5 24 29 53

Administrative Service Officer Class 4 12 32 44

Administrative Service Officer Class 3 25 49 74

A dministrative Service Officer Class 2 27 39 66

Administrative Service Officer Class 1 14 10 24

Total Administrative Seivice Officers 163 198 361

Senior Information Technology Officer G rade A 1 - 1

Senior Information Technology Officer G rade B 4 - 4

Senior Information Technology Officer G rade C 10 4 14

Information Technology Officer G rade 2 11 8 19

Information Technology Officer G rade 1 1 1 2

Total Information Technology 27 13 40

G raduate Administrative Assistant 2 1 3

Office Trainee 1 - 1

Total ‘other’ 3 1 4

Total all classifications 200 212 412

Table D3. Operative staff: classified by age group and gender as at 30 June 1994

Age Group Males Females Total

No % No % No %

U nder 20 1 0.24% 0 0.00% 1 0.24%

20-24 25 6.07% 23 5.58% 48 11.65%

25-29 36 8.74% 23 5.58% 59 14.32%

30-34 23 5.58% 21 5.10% 44 10.68%

35-39 20 4.85% 27 6.55% 47 11.41%

40-44 26 6.31% 43 10.44% 69 16.75%

45-49 37 8.98% 38 9.22% 75 18.20%

50-54 25 6.31% 28 6.55% 53 12.86%

55-59 6 1.46% 8 1.94% 14 3.40%

60 & over 1 0.24% 1 0.24% 2 0.49%

Total 200 48.79% 212 51.21% 412 100.00%

Recruitment, promotion and separation statistics

Table D4. Permanent staff: recruitment 1993-94

Method o f Entiy Males Females Total

A ppointm ent 2 1 3

Promotion 1 2 3

Transfer - - -

Total 3 3 6

ComSuper Staffing Information 89

Table 1)5. Permanent start': separations 1993-94

Method o f Separation Males Females Total

Promotion 13 10 23

Transfer 9 7 16

Resignation 19 11 30

Age R etirem ent - 3 3

Early A ge R etirem ent 2 3 5

Invalidity Retirem ent 1 - 1

A ppointm ent A nnulled - - -

Forfeiture of Office - - -

D eath - - -

Total 44 34 78

Table D6. Permanent start: promotions 1993-94

M ales Females Total

P rom otions to C om S uper 1 2 3

P rom otions w ithin C om Super - .. - -

Prom otions from C om Super 13 10 23

Total 14 12 26

P a rt-tim e s ta ff sta tistics

Table D7. Part-time start as at 30 June 1994

Part-time category Males Females Total

Perm anent Part-tim e * Staff-initiated - 12 12

* M anagem ent-initiated - 5 5

C asual/tem porary - l 1

Total - 18 18

Table D8. Temporary start: by gender and classification as at 30 June 1994

Classification MalesFemales Total

Administrative Service Officer Class 1 3

Administrative Service Officer Class 2 -

Office T rainee 1

2 5

1 1

- 1

Total 4 3 7

Appendix E

Financial Statements

AUSTRALIAN NATIONAL AUDIT OFFICE

Centenary Housi

1 9 National Cr Barton ACT 26$

our ret;

COMMONWEALTH SUPERANNUATION ADMINISTRATION INDEPENDENT AUDIT REPORT

92 Appendix E

Scope

I have audited the financial statement of Commonwealth Superannuation Administration (ComSuper) for the year ended 30 June 1994.

The statement comprises:

. Aggregate Statement of Transactions by Fund

. Detailed Statement of Transactions by Fund

. Program Summary

. Program Statement

. Statement of Supplementary Financial Information

. Notes to and forming part of the Financial Statement, and

. Certificate by the Commissioner for Superannuation and Assistant Commissioner, Business Management Branch.

The Commissioner for Superannuation and Assistant Commissioner, Business Management Branch are responsible for the preparation and presentation of the financial statement and the information contained therein. I have conducted an independent audit of the financial statement in order to express an opinion on it.

ComSuper employs the accounting policies described in Note 1 to the financial statement.

The audit has been conducted in accordance with the Australian National Audit Office Auditing Standards, which incorporate the Australian Auditing Standards, to provide reasonable assurance as to whether the financial statement is free of material misstatement. Audit procedures included examination, on a test basis, of evidence supporting the amounts and other disclosures in the financial statement, and the evaluation of accounting policies and significant accounting estimates. These procedures have been undertaken to form an opinion whether, in all material respects, the financial statement is presented fairly in accordance with Australian accounting concepts and standards applicable to public sector reporting entities employing a cash basis of accounting, and statutory requirements, so as to present a view which is consistent with my understanding of ComSuper’s operations and certain assets and liabilities.

The audit opinion expressed in this report has been formed on the above basis.

GPO Box 707 C an b e rra Australian Capital Territory 2601 Telephone (06) 203 7300 Facsim ile (06) 203 7777

Financial statements 93

Qualifications

Commonwealth Superannuation Fund No. 2

The Commonwealth Superannuation Fund No. 2 (CSS Fund) forms part of the Trust Fund. As indicated at Note 3, some contribution remittances for the Superannuation Fund No. 1 (PSS Fund) had been paid into the CSS Fund during 1993-94. The PSS Fund does not form part of the Trust Fund and the mixing of its moneys with the CSS Fund resulted in a breach of section 62A of the Audit Act 1901. The failure to account separately for all moneys of the CSS Fund and the PSS

Fund during 1993-94 was also a breach of the requirement of section 40 of the Audit Act to keep proper accounts and records, and a similar provision of the Superannuation Act 1976. The audit report on the financial statement for 1992-93 was qualified on the same basis.

Superannuation Contributions by Approved Authorities

As indicated at Note 6, ComSuper was unable to determine the amount due for superannuation pay-as-you-go contributions and emerging costs contributions from approved authorities for 1993­ 94. Because of this limitation on the scope of my audit, I am unable to form an opinion on whether the total amount of receipts for superannuation pay-as-you-go contributions by general government enterprises and public trading enterprises, and emerging costs contributions by approved authorities, brought to account in the Consolidated Revenue Fund in the financial statement differs to a material extent from the total amount of superannuation contributions legally due to the Commonwealth. This limitation also applied in respect of 1992-93.

Qualified A udit Opinion

In accordance with sub section 51(1) of the Audit Act I now report that, except for the matters mentioned above, and subject to the effects of such adjustments, if any, as might have been required had the limitation on the scope of my audit report not existed, in my opinion:

the financial statement

- is in agreement with the accounts and records kept in accordance with section 40 of the Act

- is in accordance with the Financial Statement Guidelines for Departmental Secretaries (Modified Cash Reporting) issued by the Minister for Finance, and

- presents fairly, in accordance with Statements of Accounting Concepts and

applicable Accounting Standards and the Guidelines, the transactions of ComSuper for the year ended 30 June 1994 and certain assets and liabilities as at that date, and

. there has been a breach of Commonwealth law as described in the Qualification section above

Trevor Burgess Acting Executive Director Australian National Audit Office

Canberra

30 September 1994

94 Appendix E

Commonwealth Superannuation Administration

Statement by the Commissioner for Superannuation and Principal Accounting Officer

During the financial year there were breaches of the Superannuation Act 1976 and the Audit Act 1901 as explained in Note 3 to the financial statements.

These breaches arose due to the inability of ComSuper’s computerised systems to cope with the separate demands of the financial accounting and reporting requirements of the Commonwealth Superannuation Scheme and the Public Sector Superannuation Scheme.

ComSuper is currently addressing these matters as part of the information technology upgrade that began in February 1994. This redevelopment, which will take a number of years to complete, will also address the procedures mentioned in Note 3 to the financial statements which inhibit follow-up of under / overpayment of employer (productivity) contributions.

Certification:

We certify that the attached financial statements for the year ended 30 June 1994 are in agreement with the accounts and records of Commonwealth Superannuation Administration and, in our opinion, the statements have been prepared in accordance with the disclosure requirements of the Financial Statements Guidelines for Departmental Secretaries (Modified Cash Reporting) issued in January 1994, subject

to matters noted at Note 3 in relation to the Commonwealth Superannuation Fund No 2 and Note 6 in relation to Receivables.

K.A. Searson Commissioner for Superannuation K.J. McCullagh Assistant Commissioner

Business Management Branch

27 September 1994 27 September 1994

Financial statements 95

Commonwealth Superannuation Administration Aggregate Statement of Transactions by Fund for the year ended 30 June 1994

T his statem ent show s aggregate cash transactions, fo r w hich C om Super is responsible, for each of the th ree funds com prising the C om m onw ealth Public A ccount (C PA ).

1992-93 actual $

1993-94 budget $

1993-94 actual $

CONSOLIDATED REVENUE FUND (CRF)

666 885 309 Receipts 1 171 906 000 1 201 049 494

2 895 687 494 E xpenditure from Special A ppropriations 2 945 509 000 2 848 385 938

26 377 271 E xpenditure from A nnual A p propriations 28 978 000 27 746 664

2 922 064 765 E xpenditure 2 974 487 000 2 876 132 602

LOAN FUND

nil R eceipts N il Nil

nil E xpenditure N il Nil

TRUST FUND (a)

3 837 988 872 N otional balance at 1 July 1993 3 908 250 089

590 332 758 R eceipts 517 630 763

520 071 541 E xpenditure 719 881 516

3 908 250 089 N otional balance at 30 June 1994 3 705 999 336

Represented by:

5 116 525 C ash 7 368 104

3 903 133 564 Investm ents 3 698 631 232

3 908 250 089 3 705 999 336

T his statem ent show s details o f cash transactions, lo r w hich C om Super is responsible, fo r the

C onsolidated Revenue Fund and the T ru st Fund. (C om Super w as not responsible for any transactions o f the L oan F u n d .)

Consolidated Revenue Fund tCRF)

Receipts to Cl

The C R F is the m ain w orking fund o f the C om m onw ealth and consists o f all current m onies received by the C om m onw ealth (excluding loan raising and m onies received by the T rust Fund).

C om Super is responsible for the follow ing receipt items:

96 Appendix E

Commonwealth Superannuation Administration Detailed Statement of Transactions by Fund for the year ended 30 June 1994

1992-93 actual $

Sub- 1993-94

program budget * $

1993-94 actual $

280 095 088

Superannuation — accum ulated contributions o f form er eligible em ployees and tran sfer values received (a)

Superannuation A ct 1976 1 262 106 000 300 887 309

19 912 533 Superannuation Act 1990 1 74 562 000 81 677 677

n /a

S uperannuation (M ilitary) pay-as-you-go contributions by D efence (a) 2 411 847 000 397 498 122

228 719 097

S u p eran n u atio n —pay-as-you-go contributions by general governm ent en terp rises (a) 1 360 754 000 335 726 673

112 407 553

S uperannuation — pay-as-you-go contributions by public trading enterprises (b) 1 32 067 000 37 983 832

15 915 961 Superannuation —em erging cost contributions by approved authorities (a) 1 21 438 000 38 570 019

8 924 619

A dm inistrative costs recovered from approved authorities and other bodies that meet em ployer share o f superannuation costs (a) 1 8 500 000 8 162 583

830 682 M iscellaneous (a) 3 437 000 456 956

79 776

Section 35 o f the Audit A ct 1901 — to be credited to running costs D ivision 306 — N ote 4 3 195 000 86 323

666 885 309 T O T A L R E C E IPT S C R F 1 171 906 000 1 201 049 494

(a) Receipts offset within outlays (b) Revenue

Refer to Program statement

Financial statements 97

Expenditure from CRF

The C onstitution requires that an appropriation of m onies by the Parliam ent is required before any expenditure can be m ade from the C R F. A ppropriations follow tw o form s:

• special (or standing) appropriations; and • annual appropriations.

Commonwealth Superannuation Administration Detailed Statement of Transactions by Fund for the year ended 30 June 1994 (cent.)

C om Super is responsible for the follow ing expenditure item s:

1992-93 actual s

Sub­ program *

1993-94

appropriation $

1993-94 actual $

S P E C IA L A P P R O PR IA T IO N S

2 759 229 960 Superannuation Act 1922, 1961, 1967, 1971, and 1976 1 2 631 781 000 2 620 590 725

136 457 534 Superannuation Act 1990 1 232 744 000 227 795 213

2 895 687 494 T O T A L E X P E N D IT U R E FROM S P E C IA L A P P R O PR IA T IO N S 2 864 525 000 2 848 385 938

A N N U A L A P P R O PR IA T IO N S

26 377 271

{Appropriation A ct No. 1 1 , 2 , 3

{Appropriation Act No. 2 3

{Appropriation Act No. 3 1, 2 , 3

{Appropriation Act No. 4 1

{Section 35 o f the Audit Act 1901 — to be {credited to running costs D ivision 306 { - N ote 4

28 468 000} 315 000} 237 000} nil}

} }

76 339}

27 746 664

T O T A L E X P E N D IT U R E FROM 26 377 271 A N N U A L A P P R O PR IA T IO N S 29 096 339 27 746 664

2 922 064 765 T O T A L E X P E N D IT U R E FR O M C R F 2 893 621 339 2 876 132 602

* R efer to Program statement.

98 Appendix E

Commonwealth Superannuation Administration Detailed Statement of Transactions by Fund for the year ended 30 June 1994 (cont.)

Details o f expenditure from annual appropriations

1992-93 Sub- 1993-94 1993-94

actual program appropriation actual

$ * $ $

APPROPRIATION ACTS Nos 1, 2, 3, and 4

D ivision 306 A dm inistrative

1. R unning costs (A nnotated 26 104 016 A ppropriation — N ote 4) 1, 2, 3

3. O ther services

28 431 339 27 095 662

38 895 01. C om pensation and legal expenses 1, 2, 3

02. Paym ents under subsection 34a (1) 100 000 93 093

234 360 o f the Audit Act 1901 — N ote 14 1 250 000 242 909

D ivision 864 C apital W orks and Services

1. A cquisitions, B uildings, W orks, nil P lant and E quipm ent 3 315 000 315 000

26 377 271 29 096 339 27 746 664

* Refer to Program Statement

T r u s t F u n d

T h is section discloses details o f each H ead o f the T ru st Fund and T ru st A ccount adm inistered by C om Super. It p rovides a breakdow n o f the inform ation relating to the T rust F und contained in the A ggregate S tatem ent o f T ransactions by Fund.

1992-93 1993- 94

$ $ $

O ther T ru st M oneys (C om m onw ealth Superannuation A dm inistration) • L egal A uthority — Audit Act 1901 section 60 • P urpose — fo r the receipt o f m onies

tem porarily held in tru st fo r other persons • R eceipts and expenditure — 3 831 191 C ash balance 1 July 1993 4 217 967

8 844 075 R eceipts 19 284 455

12 675 266 23 502 422

8 457 299 E xpenditure

C ash balance 30 June 1994

19 299 474

4 217 967 4 202 948

• Investm ents nil

Financial statements 99

Commonwealth Superannuation Administration Detailed Statement of Transactions by Fund for the year ended 30 June 1994 (cont.)

Trust Fund (cont.)

1992-93 1993-94 * •

$_________________________________________________ $_____________ $

C om m onw ealth Superannuation A dm inistration — S ervices fo r o th er governm ent and non-deparlm ental bodies

• Legal A uthority — A udit A ct 1901 section 60

• Purpose — paym ent o f costs in connection w ith services perform ed on b eh alf o f o th er governm ent and non-departm ental bodies

• R eceipts and expenditure

4 655 310 C ash balance July 1993

137 521 139 Receipts

142 176 449 141 402 579 E xpenditure

773 870 C ash balance 30 June 1994

773 870

134 299 450

135 073 320 133 593 457

1 479 863

• Investm ents nil

100 Appendix E

Commonwealth Superannuation Administration Detailed Statement of Transactions by Fund for the year ended 30 June 1994 (cont.)

Trust Fund (co n t.)

1992-93 1993-94

$ $ $

C om m onw ealth Superannuation Fund N o. '2 (a) - see also N ote 3

• L egal A uthority - Superannuation Act 1976 section 40

• P urpose - to accum ulate and invest co n tributions fo r the paym ent o f the em ployee com ponent o f benefits payable under the Superannuation Act 1976

3 829 502 371 N otional balance 1 July 1993 *

R eceicls *

E m ployee C ontributions

3 903 258 252

234 363 675 C om m onw ealth Superannuation Schem e 208 846 576

19 482 042 P ublic Sector S uperannuation Scheme E m ployer (P roductivity) C ontributions 1 511 069 81 705 596 C om m onw ealth S uperannuation Scheme 85 588 852

295 946 497

108 416 231 O ther receipts 68 100 361 364 046 858

4 273 469 915

less E xpenditure *

4 267 305 110

295 136 948 B enefits 313 498 933

20 265 507 O ther paym ents 40 537 880 354 036 813

3 958 067 460

less T ran sfer o f assets to -

3 913 268 297

54 809 208 O ther superannuation schem es 212 951 772

3 903 258 252 N otional Balance 30 June 1994 * 3 700 316 525

Investm ent T ransactions A ccount fb )

3 823 823 846 Invested balance 30 June 1993 * 3 903 133 564

3 979 662 523 Purchase o f Investm ents * 2 287 899 964

7 803 486 369 6 191 033 528

3 902 356 391 less R ealisation o f Investm ents * 2 503 123 102

3 901 129 978 3 687 910 426

C ash balance held by C om m onw ealth S uperannuation 2 003 586 B oard o f T rustees N o. 2 30 June 1994 * (c) 10 720 806

3 903 133 564 Invested balance at 30 June 1994 3 698 631 232

124 688 Balance in C om m onw ealth Public A ccount 30 June 1994 * 1 685 293

N o t e : * Figures are not disclosed in budget documentation.

(a) Separate financial statements in respect o f the Commonwealth Superannuation Scheme (including the Fund) arc prepared and published in the Commonwealth Superannuation Board o f Trustees 1X0 . 2 Annual Report.

(b) Investments - details o f investments o f the fund shown at market value are provided in the annual report o f the Commonwealth Superannuation Board o f Trustees No. 2.

(c) The increase in the cash balance reported for 1993-94 occurred because 30 June 1994 was a public service payday, resulting in SlOm o f employee and productivity contnbutions being deposited in the account on that day.

Financial statements 101

Commonwealth Superannuation Administration Program Summary for the year ended 30 June 1994

T his sum m ary show s the outlays for each program adm inistered by C om Supcr and reconciles total outlays to total expenditure from the C onsolidated R evenue Fund (C R F ). ‘E x p en d itu re’ refers to the actual am ount o f resources consum ed by a program w hereas ‘o u tla y s’ refers to the ‘n e t’ am ount o f resources consum ed, after offsetting associated receipts and o th er item s.

T h is sum m ary also reconciles the total receipts classified as revenue (i.e. receip ts not offset w ithin o utlays o r classified as financing transactions) fo r each p ro g ram , w ith ‘R eceipts to C R F ’.

1992-93 1993-94 1993-94

actual budget actual

$'000 $ ’000 $ ’000

Expenditure

946 856 2 930

14 456

Outlays 1. D elivery o f C om m onw ealth superannuation schem es

2. D elivery o f D efence F orce schem es 3. C orporate services

925 631 (408 874) 17 512

921 633 (394 693) 17 240

964 242 Total outlays

Plus R eceipts offset w ithin outlays

534 269 544 180

553 568 n/a 911

554 479

1. D elivery o f C om m onw ealth superannuation schem es 2. D elivery o f D efence F orce schem es 3. C orporate services

727 360 411 847 632 1 674 108

765 024 397 498 543 1 707 245

Plus expenditure from appropriations classified as financing transactions

1 403 344 1. D elivery o f C om m onw ealth superannuation schem es 1 300 379 1 168 887

2 922 065 Total expenditure from appropriations 2 974 487 2 876 132

Receipts

112 408 1. D elivery o f C om m onw ealth superannuation schem es 32 067 37 984

554 479 Plus R eceipts offset w ithin outlays 1 139 839 1 163 065

666 887 Total receipts to CRF 1 171 906 1 201 049

102 Appendix E

Commonwealth Superannuation Administration Program Statement for the year ended 30 June 1994

T his statem ent show s details o f expenditure from annual and special appropriations fo r each p rogram adm inistered by C om S uper. E ach ‘a n n u al’ ap p ro p riatio n item contributing to a program is identified by its d escription follow ed by its appropriation code in brackets. ‘S p ecial’ ap p ro p riatio n s are identified by reference to the legislation containing the special appropriation and are indicated by ‘(S A )’ follow ing the item . Partial allocations o f appropriation item s to pro g ram s are indicated by ‘(p )’ follow ing the item . W ith respect to those pro g ram s fo r w hich

‘expenditure fro m ap p ro p riatio n s’ and ‘o u tla y s’ differ, the statem ent discloses inform ation reconciling the am ounts concerned. The statem ent also show s d etails o f revenue received in respect o f each p ro g ram (w here applicable).

A detailed explanation o f each p ro g ram is provided in the body o f the annual report.

1992-93 1993-94 1993-94

actual budget actual

$ ’000 $'000 $ ’000

1. Delivery of Commonwealth siincraiinuation schemes

Superannuation Act 1922, Act 1961, Act 1967, 2 759 230 A ct 1971 and 1976 (SA) 2 678 525 2 620 591

136 458 Superannuation A ct 1990 (SA) R unning costs (306.1)(p)

266 984 227 795

6 520 Salaries 6 597 6 049

1 251 A dm inistrative expenses 911 685

41 Legal Services

C om pensation and legal expenses

68 95

34 (3 0 6 .3 .0 1 )(p )

P aym ents under subsection

35 86

234 34A (1) o f the Audit Act 1901 (3 0 6 .3 .0 2 ) 250 243

2 903 768 Expenditure from appropriations

Less receipts offset w ithin outlays

2 953 370 2 855 544

S uperannuation — A ccum ulated co n tributions o f form er eligible em ployees and tran sfer values received 280 095 Superannuation A ct 1976 262 106 300 887

19 913 Superannuation Act 1990

S uperannuation — pay-as-you-go contributions by general governm ent

74 562 81 678

228 719 enterprises

S uperannuation — em erging cost

360 754 335 727

15 916 contributions by approved authorities

A dm inistrative costs recovered

21 438 38 570

from approved authorities and other bodies that m eet em ployer 8 925 share o f superannuation costs 8 500 8 162

2 350 200 2 226 010 2 090 520

Financial statements 103

Commonwealth Superannuation Administration Program Statement for the year ended 30 June 1994 (cont.)

1992-93 actual $ ’000

1993-94 budget $ ’000

1993-94 actual $ ’000

1 402 670

Less expenditure from appropriations classified as financing transactions: Superannuation Act 1922, Act 1961, Act 1967, A ct 1971 and A ct 1976 1 299 289 1 168 295

674 Superannuation Act 1990 1 090 592

946 856 Outlays 925 631 921 633

112 408

R evenue (i.e. receipts not offset w ithin outlays o r classified as financing transactions)

S uperannuation — pay-as-you-go contributions by p u b lic trading en terp rises 32 067 37 984

2 731

2. Delivery o f Defence Force schemes

R unning costs (306.1)(p) S alaries 2 695 2 588

173 A dm inistrative expenses 239 187

21 Legal S ervices 34 23

5

C om pensation and legal expenses (3 0 6 .3 .0 1 )(p ) 5 7

2 930 Expenditure from appropriations 2 973 2 805

n /a

Less receipts offset w ithin outlays S uperannuation (M ilitary) pay-as-you-go co n tributions by D efence 411 847 397 498

2 930 Outlays 1408 874) 1394 693)

8 352

3. Corporate Services

R unning costs (3 06.1) Salaries (p) 8 549 8 793

4 493 A dm inistrative expenses (p) 6 353 6 009

32 L egal S ervices (p) 54 36

2 490 P roperty operating expenses 2 678 2 629

C om pensation and legal expenses (3 0 6 .3 .0 1 )(p ) 1

.

C apital W orks and S ervices (8 6 4 .1 .0 3 ) 315 315

n/a

Section 35 o f Audit Act 1901 (306.1) 195 n/a

15 367 Expenditure from appropriations 18 144 17 783

831

Less receipts offset w ithin outlays

M iscellaneous 437 457

80 Section 35 o f Audit Act 1901 195 86

14 456 Outlays 17 512 17 240

104 Appendix E

Commonwealth Superannuation Administration Statement of Supplementary Financial Information for the year ended 30 June 1994

1992-93 $'000

1993-94 $ ’000

Notes

C u r r e n t assets

116 C ash 109 5

74 561 R eceivables 79 085 6

349 P repaym ents 1 387 7

N o n -c u rre n t assets

2 904 R eceivables 1 598 1(g)-6

762 C om puter and office equipm ent 1 563 1(e),(1).8

701 F u rn itu re and fittings 832 l(e),8

n/a Plant and equipm ent 10 1(c),8

C u r r e n t liab ilities

125 430 C reditors 113 720 9

37 P rovisions 2 072 1(h). 10

353 847 O ther liabilities 451 128 11

N o n -C u rre n t liab ilities

n /a P rovisions 3 907 1(g),(h). 10

3 028 511 O ther liabilities 1 505 241 1(g). 11

Financial statements 105

S tatem ent o f sig n ific a n t a c c o u n tin g policies

(a) The financial statem ents have been prep ared in accordance w ith the Financial Statements Guidelines fo r Departmental Secretaries (Modified Cash Reporting) issued by the M inister for Finance in January 1994.

(b) The financial statem ents have been prepared:

• on a cash basis w ith the exception o f the Statem ent o f Supplem entary F inancial Inform ation w hich includes certain accrual-type inform ation; and

• in accordance w ith the historical cost convention. T hey do not lake account o f changing m oney values o r cu rren t values o f non-current assets.

(c) A m ounts show n in the ‘A ggregate Statem ent o f T ran sactio n s by F u n d ’ and the "Detailed Statem ent o f T ransactions by F u n d ’ (and related notes) have been rounded to the nearest dollar. A m ounts in other statem ents have been rounded to the nearest thousand dollars in accordance w ith the follow ing principles:

• am ounts have been rounded up if the three end-digits are g reater than 5 0 0 , o r dow n if less than 500;

• if the three end-digits equal 500. the am ount has been rounded to an even figure, for

exam ple:

$17 484 500 = $17 484 (even, therefore stays even); $17 483 500 = $17 484 (odd, therefore has been rounded up to even); and

• all totals are the rounded additions o f unrounded figures.

(d) A dm inistrative expenses show n in the Program Statem ent include m inor capital expenditure item s as they are considered part o f ordinary annual services for the p u rp o ses o f the A pp ro p riatio n A cts. ‘M in o r capital ex p en d itu re’ includes item s o f capital expenditure costing less than $250 000.

(e) F o r 1 9 9 3 -9 4 non-current assets w ith a unit value g reater than o r equal to $500 have been accounted fo r in the Statem ent o f Supplem entary Financial Inform ation. 1 9 9 2 -9 3 figures reported are non-current assets w ith a unit value g reater than or equal to $1000. F o r both financial years the assets accounted fo r are valued at th eir cost o f acquisition and allow ance for depreciation has been m ade (see also N ote 8).

(i) A ll n o n-current depreciable assets are w ritten o ff over their estim ated useful lives with depreciation calculated using the straight line m ethod consistent w ith the estim ated asset usage. D epreciation com m ences from the date o f acquisition.

(ii) The figures disclosed for C om puter and O ffice E quipm ent, F urniture and F ittings and Plant and E quipm ent for 1 9 9 3 -9 4 are based on records as at 30 June 1994.

Commonwealth Superannuation Administration Notes to the Financial Statements for the year ended 30 June 1994

Note 1

106 Appendix E

Commonwealth Superannuation Administration Notes to the Financial Statements for the year ended 30 June 1994 (cont.)

N ote 1 (co n t.)

(f) The Financial Statements Guidelines fo r Departmental Secretaries (Modified Cash Reporting) issued by the M inister fo r Finance in January 1994 rem oved the exclusion on disclosure req u irem en ts for the reporting o f com puter softw are assets fo r 1993— 94. C om Supcr has not included a fig u re fo r this item in the Statem ent o f S upplem entary Financial Inform ation as D epartm ental records and system s do not contain the necessary details to provide a reliable value. T he p ro b lem s associated w ith provision o f this inform ation w as further com plicated by

the p rio rity given to the current inform ation technology m odernisation process being undertaken in C om Super. T his upgrade is to include a significant replacem ent/upgrade o f the m ajority o f the cu rren t softw are run on C om Super system s. A long w ith this upgrade C om S uper w ill be putting system s and policies in place to reco rd , w here capitalisation is ap p ro p riate, both cost and depreciation o f all new softw are.

(g) A ll n o n -cu rren t receivables and cred ito r liabilities are reported at nom inal values unless stated. W here these am ounts are stated at present values the appropriate discount rate used is disclosed for inform ation.

(h) A ccrued em ployee entitlem ents fo r C om super em ployees, except for superannuation, have been accounted fo r in the p ro v isio n s balance in the Statem ent o f Supplem entary Financial Inform ation. The provisions include accrued long service leave, recreation leave and leave bonus, pro v isio n for perform ance pay and provision for paym ent o f accrued em ployee study expenses. The provision also includes accrued salary expenses ow ing as at 30 June 1994 (see

also N ote 10).

P ro v isio n fo r long service leave has been calculated based on an assessm ent o f past service records o f em ployees rem aining w ith C om Super against a predeterm ined benchm ark for initial calculation o f long service leave p ro v isio n s. The pro v isio n is calculated by m ultiplying the

p ro -rata entitlem ent for each em ployee w hose service exceeds the benchm ark by the substantive salary rate (inclusive o f S enior O fficer and F irst A id allow ances) applicable at the end o f the reporting period. D eterm ination o f current and non-current provisions is based on past history o f paym ents.

P rovision for A nnual Leave is based on the legal entitlem ent o f em ployees as at 30 June 1994 and w as calculated based on the outstanding em ployee entitlem ents m ultiplied by the substantive salary rate (inclusive o f S enior O fficer and F irst A id allow ances) applicable at the end o f the reporting period. D eterm ination o f current and non-current provisions is based on past history o f paym ents.

N ote 2

E x p la n a tio n o f m a jo r v a ria tio n s o f 10% o r m o re

O ne m ajor variation occurred in the A ggregate Statem ent o f T ransactions by Fund (page 95). R eceipts increased by 80% over the p revious year. The p rim ary factors driving the increase are explained below in relation to the D etailed Statem ent o f T ransactions By Fund.

Financial statements 107

The follow ing m ajor v ariations from 199 2 -9 3 to 1 9 9 3 -9 4 , outlined in the D etailed Statem ent of T ransactions by F und (pages 96-97), occurred:

• receipts from ’S uperannuation - accum ulated co ntributions o f form er elig ib le em ployees and tran sfer v alues received ’ from the PSS increased by 410% due p rim arily to a change in accounting arrangem ents arising from the Superannuation Legislation Amendment A ct 1992 w h ereb y , unless a benefit becom ing payable to a beneficiary can be fully m et from m oneys

held in the PSS S uperannuation Fund the accum ulated em ployee and p roductivity co n trib u tio n s are transferred to the C onsolidated R evenue Fund and the benefit is paid to the beneficiary from C onsolidated R evenue (under the p rev io u s accounting arrangem ents, benefits w ere paid to beneficiaries direct from the PSS Superannuation F u nd).

• receipts from ’S uperannuation pay-as-you-go co n trib u tio n s by general governm ent e n te rp rise s’ increased by 47% p rim arily due to new co n trib u to rs on pay-as-you-go arrangem ents.

• receipts from ’S uperannuation pay-as-you-go co ntributions by public trad in g e n terp rises’ decreased by 66% due p rim arily to m any public trad in g enterprises now conducting their ow n superannuation schem es. •

• expenditure from the S pecial A ppropriation Superannuation A ct 1990 increased by 67% due p rim arily to grow th in the num ber o f schem e beneficiaries in receipt o f pension and lum p sum paym ents.

The follow ing m ajor v ariatio n s from the 199 3 -9 4 b udget estim ates to actuals, outlined in the D etailed Statem ent o f T ransactions by F u n d , occurred:

• receipts from ’Superannuation - accum ulated co n trib u tio n s o f form er eligible em ployees and tran sfer values received ’ from the CSS w ere 15% higher than estim ated due to an underestim ation o f am ounts receivable.

• receipts from ’S uperannuation pay-as-you-go co n trib u tio n s by public trad in g en terp rises’ w ere 18% higher than estim ated prim arily due to the discharge o f an actuarially determ ined o utstanding liability by an approved authority - the am ount having not been included in the o rig in al budget estim ate.

• receipts from ’Superannuation em erging cost co n trib u tio n s by approved authorities w ere 80% higher than o riginally estim ated prim arily due to receipt o f outstanding liabilities calculated and advised after B udget estim ates w ere finalised.

Commonwealth Superannuation Administration Notes to the Financial Statements for the year ended 30 June 1994 (cont.)

Note 2 (Cont.)

N ote 3

C o m m o n w e a lth S u p e ra n n u a tio n F u n d N o. 2

The C om m onw ealth Superannuation Fund N o. 2 (CSS F und) is established under the Superannuation A ct 1976 and form s p art o f the C om m onw ealth Public A ccount. T he financial transactions o f the CSS Fund as show n in the ‘D etailed statem ent o f transactions by the fund for the year ended 30 June 1994’ reflect the receipt and investm ent o f em ployee and em ployer (productivity) superannuation co ntributions, the paym ent o f benefits and the tran sfer o f assets w here fo rm er CSS m em bers have tran sferred to the P ublic S ector S uperannuation Schem e (PSS) o r to su perannuation schem es set up by th eir em ployer.

The C SS and PSS F unds com m enced to operate as separate entities from 1 July 1992. P rior to this the CSS and PSS w ere m anaged as a com bined fund. In line w ith the CSS and PSS com m encing operations as separate entities the C om m issioner for S uperannuation w rote to all em ployers outlining the separate rem ittance p rocedures required fo r CSS and PSS em ployee and em ployer (productivity) contributions. The D epartm ent o f F inance, w hich processes over 45 per cent o f the contributions received by the CSS and PSS im plem ented separate rem ittances from the beginning o f 1 9 9 2 -9 3 . O ther em ployers have p rogressively im plem ented changed arrangem ents o v er the last tw o financial years how ever, som e em ployers have continued to provide com bined CSS and PSS

rem ittances resulting in som e PSS em ployee and em ployer (productivity) contributions being paid into the CSS d u ring 1993-94.

R econciliations o f CSS and PSS em ployee and em ployer (productivity) contributions for 1993-94. from inform ation m aintained on the contributor records fo r the separate schem es, w ere undertaken at stages th rough the year w ith a final reconciliation being prepared after the close o f the financial year. T he final reconciliation disclosed that PSS contributions o f $1 511 069 w ere still held in the CSS Fund at 30 June 1994.

O verall, th is represents breaches o f section 40 o f the A udit A ct 1901 (w hich requires proper records to be kept), section 50(2) o f the Audit A ct 1901 and the financial statem ent guidelines issued under section 5 0 a a o f the A udit A ct 1901 w hich require transactions of the T ru st Fund t o be acurately reported. It also represents a breach o f section 44 o f the Superannuation A ct 1976 w hich req u ires p ro p er accounts and records to be m aintained in respect o f the CSS Fund.

E m ployer (Productivity') C ontributions

Perm anent arrangem ents for the adm inistration o f the em ployer (productivity) contribution benefit w ere im plem ented from 1 July 1990. The perm anent arrangem ents require all D epartm ents and other agencies, that do not have alternative arrangem ents in respect o f the productivity benefit, and em ploy m em bers o f the CSS and/or PSS to pay em ployer (productivity) contributions to the CSS and PSS F unds.

In developing p ro ced u res for the adm inistration o f the perm anent arrangem ents, contribution collection agencies w ere requested to report the total em ployer (productivity) contributions paid each fortnight. H ow ever, em ploying D epartm ents and agencies, w ere not required to report em ployer (productivity) contributions each fortnight at individual m em ber level.

108 Appendix E

Commonwealth Superannuation Administration Notes to the Financial Statements for the year ended 30 June 1994 (cont.)

Financial statements 109

Commonwealth Superannuation Administration Notes to the Financial Statements for the year ended 30 June 1994 (cont.)

Note 3 (cont.)

Systems and p ro ced u res have been developed to provide separate em ployer (p roductivity) contribution inform ation necessary for the purpose o f p rep arin g CSS and PSS financial statem ents and also to identify the fortnightly am ount payable by each D epartm ent and agency.

Although u n der/overpaym enls o f em ployer (productivity) co n tributions are not m aterial for the purpose o f p ie p a rin g the CSS and PSS financial statem ents the lack o f inform ation at individual member level and details o f am ounts rem itted on b eh alf o f B udget funded D epartm ents and agencies inhibits follow -up action. C om S uper is addressing the future accounting arrangem ents for em ployer (productivity) co n tributions th rough a m ajor redevelopm ent o f the co n trib u tio n s system . * •

Note 4

R u n n in g costs (a n n o ta te d a p p r o n r ia tio n 306.11

This ap p ro p riatio n w as annotated p ursuant to section 35 o f the Audit Act 1901 to allow the crediting o f certain receipts, including:

• co n trib u tio n s from SES o fficers tow ards the provision o f m otor vehicles;

• co n trib u tio n s from officers tow ards the provision o f official telephones;

• co n trib u tio n s from participants tow ards the cost o f conducting conferences and sem inars;

• co n trib u tio n s from A PS and non-A PS agencies, on a direct cost-recovery b asis, to facilitate the p rocessing o f extra-o rd in ary requests for inform ation, the resources for w hich are not currently provided in the O ffice’s appropriation;

• sale o f Ready R eckoner and E X PO softw are packages developed by C oinS uper;

• corporate sponsorship or advertising receipts used to offset costs o f co n d u ctin g schem e in fo rm atio n , m arketing o r prom otional activities;

• sale o f p rom otional m aterial to financial planners and governm ent business en terp rises in respect o f C SS/PSS m arketing activity;

• am ounts recovered from so licito rs for provision o f inform ation required fo r Fam ily C ourt m atters;

• sale o f su rp lu s o r u n d erperform ing personal property assets;

• freedom o f inform ation charges; and

• A ustralian T raineeship System (A T S) and C areer S tart T raineeship (C S T ) subsidies.

The annotated appropriation operated as follow s:

Annotated appropriation

$28 355 000

Receipts Appropriation

$28 431 339

Expenditure

$27 095 662 $76 339

110 Appendix E

Commonwealth Superannuation Administration Notes to the Financial Statements for the year ended 30 June 1994 (cont.)

N ote 5

C ash

A s at 30 June 1994 the follow ing cash on hand and at banks w as held:

1992-93 $

1993-94 $

1 185 - On Hand (cash and cheques)

108 713 — At banks fa)

95 378 13 195

115 898 108 573

(a) C om S uper also m aintains a corporate credit card settlem ent account held w ith the R eserve Bank to facilitate paym ent for expenditure incurred by officers using the A ustralian G overnm ent C orporate C redit C ard. A t 30 June the credit balance o f this account w as $203. T h is am ount is not included in the reported bank balance.

N ote 6

R eceivables

1992-93 $

Item

Less than 30 days 30 — 60 days

$

More than 60 days ' $

Total $

C u rre n t R eceivables

A ccum ulated contributions

31 696 816 1976 A ct (a) 21 383 000 3 760 000 3 739 000 28 882 000

A ccum ulated contributions

10 106 649 1990 A ct (a) 6 888 000 906 000 900 000 8 694 000

E m ployer superannuation

29 953 969 contributions (b & c) 12 884 803 1 513 943 23 831 127 38 229 873

R ecovery o f C om Super

2 398 524 adm inistration costs 309 247 88 535 2 341 562 2 739 344

529 857 B enefit debtors 78 897 39 489 596 239 714 625

- O ther - - 1 200 1 200

74 685 815 Sub-total 41 543 947 6 307 967 31 409 128 79 261 042

Less Provision fo r

(125 318) doubtful debts (175 929)

79 085 112 74 560 497 N et C urrent R eceivables

112 Appendix E

Commonwealth Superannuation Administration Notes to the Financial Statements for the year ended 30 June 1994 (cont.)

N ote 6 (co n t.)

The contribution rates fo r each organisation are subject to triennial actuarial review . The actuarial review c o n sid ers changes in the p ,;f il e o f CSS and F3S and also the tim ing and am ount o f the em ployer su perannuation contribution paid to the C om m onw ealth during the p revious period.

T herefore, the perform ance o f each organisation in the paym ent o f their fortnightly em ployer superannuation contribution affects the rate set after each actuarial review .

(c) T his balance represents am ounts receivable under term arrangem ents beyond 12 m onths from the close o f the 1993 -9 4 financial year and is reported at its present value. The discount rale used w as 10% consistent w ith that contained in the actuarial report on w hich term repaym ents w ere based.

The 1992-93 balance o f $2 904 091 w as included in the em ployer contributions balance of $32 858 060 disclosed in last years statem ents.

D uring 1 9 9 3 -9 4 the receipt o f em ployer superannuation contributions w as m onitored against Budget estim ates. System s, w hich w'ould allow C om Super to ensure that am ounts actually receivable (as opposed to estim ates) agree w ith am ounts received through the year, have not yet been developed.

A uthorities that m eet their liability on an em erging cost basis do so by reim bursing the C om m onw ealth for the cost o f benefits as they are paid. C om m onw ealth S uperannuation A dm inistration is required to advise such authorities o f the fortnightly cost o f benefits paid (lump sum s and p ensions) to the form er m em bers.

E m ployer co n trib u tio n s due for 1993-94 includes:

• the accum ulated liabilities for a num ber o f authorities resulting from actuarial review s carried out in p rev io u s years; and

• C om S uper estim ates for em ployer liabilities for em erging cost authorities w hich have not been advised to the authorities.

A m ounts ow ing fo r lum p sum s from som e authorities cannot be estim ated and have not been included in the balance. A s w ith pay-as-you-go authorities. C om Super is still to develop adequate- system s to ensure that am ounts actually receivable (as opposed to estim ates) agree w ith am ounts received th ro u g h the year.

114 Appendix E

N ote 9

Commonwealth Superannuation Administration Notes to the Financial Statements for the year ended 30 June 1994 (cont.)

C re d ito rs

A t 30 June 1994 C om S uper had outstanding cred ito rs as follow s:

1992-93 $ Item

Less than 30 days 3 0 —60 days $ $

M ore than 60 days $

Total $

155 080 A dm inistrative expenses 48 363 288 - 48 651

6 680 P roperty operating expenses - - 1 257 1 257

13 479 L egal expenses 11 195 2 914 15 899 30 008

66 046 455

S uperannuation A cts — L um p sum benefits payable from CSS Special A pprop - 1976 Act 39 824 000 7 441 000 7 327 000 54 592 000

31 386 574

L um p sum benefits payable from PSS Special A pprop - 1990 A ct 17 819 000 2 289 000 6 019 000 26 127 000

26 657 350 P ensions accrued to 30 June 1994 31 947 306 31 947 306

1 033 593 P ension applications on hand 451 175 171 381 344 224 966 780

130 636 O ther 7 468 - - 7 468

125 429 847 90 108 507 9 904 583 13 707 380 113 720 470

A ge analysis o f cred ito rs: 1992-3 to 1993^4

1 9 9 2 -9 3 O verdue: 1 9 9 3 -9 4

103 728 224 13 717 838 7 983 785

125 429 847

- L ess than 30 days - 30 to 60 days

- M ore than 60 days

90 108 507

9 904 583

13 707 380 113 720 470

A nalysis o f cred ito rs by entity: 1993-94:

Entity

30 days $ 30 — 60 days $

M ore than 60 days $

1993-94 Total $

C om m onw ealth D epts O ther C om m onw ealth

10 653 2 914 17 156 30 723

controlled entities 17 362 - - 17 362

O ther 90 080 492 9 901 669 13 690 224 113 672 385

Total 90 108 507 9 904 583 13 707 380 113 720 470

Financial statements 115

Note 10

Provisions

P rovision has been made fo r C o m S u p er’s liability fo r em ployee entitlem ents [excluding superannuation see N ote 1(h)] w hich w ere not p reviously disclosed, prepaid em ployer superannuation contributions and prepaid C om Super charges (previously disclosed as a creditor

liability). T he p rovisions are as follow s:

Commonwealth Superannuation Administration Notes to the Financial Statements for the year ended 30 June 1994 (coni.)

1992-93 $

1993-94 $

Current Provisions

n/a

36 574 36 574

E m ployee entitlem ents and accrued expenses Prepaid em ployer contributions and C om S uper charges 1 844 583 227 634

2 072 217

Non Current Provisions

n/a E m ployee entitlem ents 3 906 755

Note 11

Other Liabilities

A t the 30 June 1994 the C om m onw ealth had other outstanding liabilities relating to Superannuation (C SS) E m ployer C om ponent Paym ents to other agency superannuation schem es, nam ely T elecom , A ustralia P ost, C om m onw ealth S erum L aboratories, A ustralian N ational Rail, F ederal A irp o rts C orporation and the C ivil A viation A u th o rity . T hese liabilities arc contained in

determ inations made by the M inister fo r Finance under subsections 134(4), 2 4 0 (f) and 241(1) of the Superannuation A ct 1976.

T he liabilities range in tim efram es o f 9 to 45 years. F o r 1 9 9 3 -9 4 , the n on-current portion o f the liability has been discounted to present value at the C om m onw ealth ten year bond rate as at 30 June 1993.

The breakdow n o f this liability betw een current and non-current is as follow s:

1992-93 $

1993-94 $

353 846 591 C u rren t L iability 451 128 419

3 028 510 733 N on-C urrent 1 505 240 624

3 382 357 324 1 956 369 043

Financial statements 117

Commonwealth Superannuation Administration Notes to the Financial Statements for the year ended 30 June 1994 (cont.)

Note 15

Waiver o f rights to payment o f monies

Recovery of the following overpayments from the Consolidated Revenue Fund was waived during 1993-94:

1992-93 1993-94

$ Number $

9 500 under subsection 156(4) o f the Superannuation A ct 1976 4 6 442

Note 16

Amounts written off

The following details are furnished in relation to amounts written off during the financial year 1993-94:

1992-93 ___________1 9 9 3 - 9 4 ______________

$ Up to SI 000 Over SI 000

Number S Number $

— under subsection 7 0 c (l) o f the Audit A ct 1901

- (i) L osses o r deficiencies o f public m oneys - - - -

- (ii) Irrecoverable am ounts o f revenue - - - -

- (iii) Irrecoverable debts and overpaym ents - - - -

(iv) L ost, deficient, condem ned, - unserviceable o r obsolete stores - - - -

— under subsection 156(4) o f the Superannuation Act 1976 in respect o f am ounts overpaid from the 172 664 C onsolidated Revenue Fund 284 18 590 8 32 002

- — under S ection 39 o f the Superannuation Act 1990 - - - -

Note 17

Resources received free o f charge

D uring the 1 9 9 3 -9 4 financial year, a num ber o f C om m onw ealth departm ents and agencies provided serv ices to the O ffice w ithout charge. E xpenditures fo r the services w ere m et from those d ep artm en ts’ ap propriations. T he m ajo r services received include the follow ing:

Department o f Finance

• accounting services in the form o f com puterised ledger and payroll services;

• cheque and direct credit processing system s for the paym ent o f pensions and lum p-sum superannuation benefits;

• use o f m ainfram e com puter facilities for the m aintenance o f contributor and pensioner records and associated com puter-based system s and procedures; and

• internal audit services.

Insurance and Superannuation Commission

• pro v isio n o f advice on the application o f occupational superannuation standards to the superannuation schem es.

118 Appendix E

Commonwealth Superannuation Administration Notes to the Financial Statements for the year ended 30 June 1994 (cont.)

Note 18

Unacnuitted advances

T here w ere no unacquitted advances from this O ffice’s running costs appropriation that w ere overdue as at 30 June 1994.

Note 19

Auditor’s remuneration

The estim ated cost o f audit services provided by the A ustralian N ational A udit O ffice in the year ended 30 June 1994 is $100 500 (1 9 9 2 -9 3 : $76 950).

Financial statements 119

Glossary o f terms used in the financial statements

Act o f grace payments: Section 34 a o f the Audit A ct 1901 p rovides that, in special circum stances, the C om m onw ealth m ay pay an am ount to a p erson notw ithstanding that the C om m onw ealth is not under any legal liability to do so.

Administrative expenses: includes not ju s t expenditure on office-based activities but all operational ex penditure (excepting salaries). The item includes both direct costs and overhead expenditure; it includes, inter alia, m inor capital expenditure w hich is considered part o f ordinary annual services; it does not in clude, in ter alia, m ajor capital expenditure, g ran ts, loans or subsidies.

Advance to the Minister for Finance (AMF): the contingency provisions appropriated in the Supply A cts and the annual A p p ro p riatio n A cts to enable funding o f urgent ex p en d itu res not foreseen at the tim e o f preparation o f the relevant B ills. T hese funds may also be used in the case of changes in expenditure p rio rities to enable ‘tra n sfe rs’ o f m onies from the p u rp o se fo r w hich they w ere o riginally appropriated to another purpose pending specific appropriation.

Annual appropriations: A cts w hich appropriate m onies fo r expenditure in relatio n to the G o v ern m en t’s activities d u ring the financial year. Such appropriations lapse o n 3 0 June. They include the Supply A cts and A p p ro p riatio n A cts.

Appropriation: authorisation by Parliam ent to expend public m oneys from the C onsolidated Revenue Fund o r L oan Fund fo r a p articu lar purpose, o r the am ounts so authorised. All expenditure (i.e . outflow s o f m onies) from the C om m onw ealth Public A ccount m ust be ap p ropriated, i.e. authorised by the P arliam ent. The authority fo r expenditure from individual trust accounts is provided u n d er the A udit A ct 1901 o r an A ct establishing the tru st account and

specifying its purposes. (See also ‘Annual appropriations’ and ‘Special appropriations’.)

Appropriation A ct (No. 1): an A ct to appropriate m onies from the C onsolidated R evenue Fund for the o rd in ary services o f governm ent.

Appropriation A ct (No. 2): an A ct to appropriate m onies from the C onsolidated R evenue Fund for other than o rdinary annual serv ices. U nder existing arrangem ents betw een the tw o H ouses o f P arliam ent, this A ct includes ap propriations in respect o f new policies (apart from those funded under special appropriations), capital w o rk s and services, plant and equipm ent, and paym ents to the S tates, the N o rth ern T e rrito ry and the A ustralian C apital T e rrito ry .

Appropriation A cts (Nos 3, 4 and 5): w here an am ount provided in an A pp ro p riatio n A ct (N o .l o r N o .2) is insufficient to m eet approved obligations falling due in a financial year, additional ap propriation m ay be provided in a fu rth er A pp ro p riatio n A ct (N o .3, N o .4 o r N o .5). A p p ro p riatio n s may also be provided in these A cts fo r new expenditure p ro p o sals.

Appropriations classed as financing transactions: refers to appropriations w hich are classified as financing transactions rather than outlays because they are considered to be closely o r functionally related to the repaym ent o f loans o r com prise transactions involving financial assets o r liabilities. T hey m ainly com prise repaym ents o f principal on loans. (See also ‘Financing transactions’.)

120 Appendix E

Appropriations classified as revenue: refers to appropriations w hich arc netted against receipts. T hey do not form part o f outlays because they are considered to be closely o r functionally related to certain revenue item s o r relate to refunds o f receipts and are therefore show n as offsets to receipts, e .g . refunds o f pay-as-you-earn tax instalm ents, w orking capital advance to the G overnm ent P rinter.

A u d it A c t 1901: the principal legislation governing the collection, paym ent and reporting o f public m oneys, the audit o f the Public A ccounts and the protection and recovery o f public p roperty. F inance reg u latio n s and directions are m ade pursuant to the A ct.

Commitment (Forward Obligations): com m itm ents existing at 30 June w hich create o r are intended to create a legal liability on the C om m onw ealth to provide funds in future years and w hich have not been exem pted from the forw ard obligations system . In special circum stances, arrangem ents w hich do not create a legal liability, but w hich require forw ard obligations cover for effective p ro g ram m anagem ent, may also be included in the forw ard obligations system , e.g . m em oranda o f understanding w ith other governm ents and foreign-aid arrangem ents. The follow ing item s are exem pted from the forw ard obligations system s:

• all item s classified in A ppropriation A cts as running costs (i.e. salaries, adm inistrative and op eratin g expenses);

• those item s fo r w hich paym ent is authorised by special legislation w here the am ount and tim ing o f paym ents are specified o r clearly dictated by eligibility criteria (i.e. m ost, but not all, special appropriations); and

• those item s w hich have been exem pted by the M inister fo r Finance as a result o f specific case- by-case requests from departm ents.

Commonwealth Public Account (CPA): the m ain bank account o f the C om m onw ealth, m aintained at the R eserve Bank into w hich and out o f w hich the cash receipts and cash paym ents o f C om m onw ealth departm ents and o th er financially non-autonom ous agencies are required to be transacted. It com prises the L oan F u n d , the T ru st Fund and inflow s to the C onsolidated Revenue

Fund.

Consolidated Revenue Fund (CRF); Loan Fund; Trust Fund: the three funds constitute the C om m onw ealth Public A ccount (C PA ).

• C R F — the principal w orking fund o f the C om m onw ealth m ainly financed by taxation, fees and o th er cu rren t receipts. The C onstitution requires an appropriation o f m onies by the P arliam ent before any expenditure can be m ade from the C R F. T hese follow tw o form s: .

(i) annual appropriations consisting o f Supply A cts (N os 1 and 2), the Supply (P arliam entary D ep artm en ts) A ct, the A ppropriation A cts (N os 1 to 4) and the A ppropriation (P arliam entary D epartm ents) A cts (N os 1 and 2) (the Supply A cts relate to the first five m onths o f the financial year and are subsum ed by the corresponding A ppropriation A cts); and

(ii) special o r standing appropriations.

• L oan Fund — authority for its establishm ent com es from the A udit A ct. A ll m onies raised by loan on the public credit o f the C om m onw ealth are credited to the L oan Fund. E xpenditures from the L oan Fund require an appropriation by P arliam ent and are lim ited to the purpose(s) for w hich m onies w ere originally raised as specified.

Financial statements 121

• T ru st Fund — essentially com prises trustee funds (term ed ‘heads o f tru s t’) established under section 60 o f the A udit A ct (i.e. m onies held in tru st fo r the benefit o f p erso n s o r bodies other than the C om m onw ealth); tru st accounts established under section 62a o f the A udit A ct (i.e. w orking accounts covering certain governm ent agencies and certain other accounts in the nature o f ‘suspense accounts’); and tru st accounts established under other A cts to m eet future expenditure.

P aym ents into the T ru st F und may be by w ay o f ap p ro p riatio n from the C R F o r L oan Fund or direct cred it o f private m onies. E xpenditure from the T ru st F und is appropriated for (and lim ited to ) the specific p urposes o f each trust account, o r head o f tru st, by the A udit A ct or the A ct establishing the trust account or head o f trust. U nlike the unused p o rtio n o f annual

ap p ro p riatio n s, tru st account balances (as w ith ‘sp ecial’ o r ‘stan d in g ’ ap p ro p riatio n s) do not lapse at the end o f the financial year.

Estimate: the level o f paym ents o r receipts expected fo r the period o f the B udget (i.e. from 1 July to 30 June)

Expenditure: the total or g ro ss am ount o f m oney spent by the G overnm ent on any o r all o f its activities (i.e. the total outflow o f m onies from the C om m onw ealth Public A cco u n t) (c.f.

‘o u tlay s’). A ll expenditure* m ust be appropriated, i.e . authorised by the P arliam ent (see also ‘Appropriations’). E very expenditure item is classified to one o f the econom ic concepts of outlays, revenue (i.e. offset w ithin revenue) o r financing transactions.

Financing transactions: relate to the raising and repaym ent o f loan principal o r transactions involving financial assets o r liabilities (e.g . changes in investm ents o r holdings o f cash). They represent the difference betw een outlays and revenue and hence involve the investm ent o f Budget surpluses o r the financing o f B udget deficits. (See also ‘Appropriations classified as financing transactions’.)

Loan Fund: See ‘Consolidated Revenue Fund'.

Outlays: an econom ic concept w hich show s the net extent to w hich resources are directed through the B udget to other sectors o f the econom y after offsetting recoveries and p aym ents against relevant expenditure item s, i.e. outlays consist o f expenditure net o f associated receipt item s. (See also ‘Appropriations classified as revenue"; ‘Appropriations classified as financing

transactions’; and Receipts offset within outlays’.)

Receipts: the total o r gross am ount o f m onies received by the C om m onw ealth (i.e. the money flow into the C om m onw ealth P ublic A ccount). E very receipt item is classified in one o f the econom ic concepts o f revenue, outlays (i.e . offset w ith in outlays) o r financing transactions.

Receipts offset within outlays: refers to receipts w hich are netted against certain expenditure item s because they are considered to be closely or functionally related to those item s, e.g. receipts from com puter hire charges are offset against the ru nning costs o f the d ep artm en t’s accounting and m anagem ent inform ation system s.

122 Appendix E

Revenue: item s classified as revenue are receipts w hich have not been offset w ithin outlays o r classified as financing transactions. T he term ‘rev en u e’ is an econom ic concept w hich com prises the net am ounts received from taxation, interest, regulatory functions, investm ent holdings and governm ent business undertakings. It excludes am ounts received from the sale o f governm ent

services o r assets (these are offset w ithin outlays) and am ounts received from loan raisings (these are classified as financing transactions). Som e expenditure is offset w ithin revenue, e.g . refunds of pay-as-you-earn tax instalm ents and the operating expenditure o f budget sector business undertakings. (See also ‘Receipts’.)

Running Costs: includes salaries (SES and non-SE S), adm inistrative expenses (including m inor capital co sts), legal services provided by the A tto rn ey -G en eral’s D epartm ent and p roperty operating ex penses. R unning costs generally refer to am ounts consum ed by agencies in providing the governm ent services for w hich they are responsible and are funded by A ppropriation A cts and

also by receip ts w hich are raised through the sale o f assets o r interdepartm ental charging and arc deem ed to be appropriated [know n as Section 35 receipts received via annotated running costs appropriations].

Special (standing) appropriation: m onies appropriated by a specific A ct o f Parliam ent for a specific p urpose (e.g . unem ploym ent benefits, grants to States for schools). T hey m ay o r may not be for a specific am ount o f m oney o r particular period o f tim e. Special appropriations do not require annual spending authorised by the Parliam ent as they do not lapse at the end of each financial y ear. A distinction is som etim es m ade betw een standing and special appropriations.

Special ap p ro p riatio n s refer to an open-ended appropriation o f the C onsolidated Revenue Fund by the enabling A ct o f a legislatively based p ro g ram . The am ount appropriated w ill depend on the dem and fo r paym ents by claim ants satisfying program eligibility criteria specified in the legislation. S pecial appropriations can be regarded as som ew here betw een standing and annual appropriations. W hile a specified am ount is provided, it is included in a separate Bill authorising the p articu lar p rogram and can be specified fo r any num ber o f years.

Trust Fund: See ‘Consolidated Revenue Fund’.

Unacquitted Advance: refers to m onies that have been m ade available by the C om m onw ealth subject to conditions that have yet to be com plied w ith by the person to w hom the advance w as m ade.

Appendix F

Index of requirements

This annual report is produced in accordance with the Department of Prime Minister and Cabinet paper titled The Preparation o f Departmental Annual Reports (as amended in March 1994). To aid access to information on these requirements, the following table lists details of where, if applicable, the requirements have been met.

In accordance with amended requirements for annual reports issued by the Department of the Prime Minister and Cabinet in March 1994, certain topics that have been reported upon in previous annual reports are no longer required to be included in reports. Details of these topics are shown at the end of this index.

Commissioner’s Statement Government Companies

01-03 iii

22-24 n/a

04 n/a Major Documents

Aids to Access 25 79-82

05 V Program Reporting

06 129

07 iv

Activities

27-27 39-76

Corporate and Portfolio Overview Objectives Social Justice

08 (a) 17-21 28 41, 53, 64

( b ) ix

29 n/a

Social Justice Overview Human Resources

09 41, 53, 64 Stalling Overview

Corporate Structure

30-31 32

66, 87-90 n/a

10 20-21

11 19 Performance Pay

Portfolio Legislation and Statutory

33-34 66, 125

Authorities Training

12 125 35 ( a ) - ( d ) 67-68

13 n/a 36 68, 88

14 ii- iii 37-38 125

15 n/a

16-17 ii Interchange Scheme

Non-statutory Bodies

39 n/a

18-21 n/a

123

124 Appendix F

Equal Employment Opportunity (EEO)

40 68, 90

Industrial Democracy

41 85

Occupational Health and Safety

42 83

43 n/a

Other resources Financial Statements

44 91-122

Fraud Control

45-47 72, 125

Claims and Losses

48-49 n/a

Purchasing

50-51 125

Consultancy Services

52-57 125

Capital Works

58 n/a

Laboratory services

59 n/a

External Scrutiny

60-63 n/a

Inquiries by Parliamentary Committee

64-66 n/a

Comments by the Ombudsman

67-69 n/a

Decisions of Courts and Administrative Tribunals

70-72 12-14

Freedom of Information (FOI)

73

Privacy

79-82 1

74-79 125

Client Comments

80-81 n/a

Impact Monitoring

82-83 n/a

Status of Women

84 Environment Matters

n/a

85-90 n/a j

Advertising and Market research n/a ]

Additional information available upon request

The revised A nnual R eport Requirem ents issued by the D epartm ent of the Prime M inister and Cabinet in M arch 1994 have removed the necessity for reporting bodies to incorporate full particulars of the following categories into their annual reports. T here does remain, however, a requirem ent to be able to produce all relevant information to Parliament and other interested parties at short notice.

Should readers require any information on the following activities they should contact the Schemes Prom otion G roup on telephone 252 7528 who will arrange access to the required documents.

Legislation administered by the Commissioner for Superannuation, the Commonwealth Superannuation Administration and the various Boards of Trustees

Equal Employment Opportunity

ComSuper's E E O program was approved by the Public Service Commission (PSC) in August 1991. The program aims to eliminate discriminatory practices where they exist by emphasising the integration of the principles of E E O into key areas of people management.

Index o f requirements 125

Privacy Act operations

All requests involving the disclosure of information of a personal nature relating to clients of the agency are dealt with having regard to the Inform ation Privacy Principles.

Staffing matters

Limited staffing information is provided at pages 66-68 and also at appendix D (page 87). Should readers require additional information (including more specific details on Perform ance Pay) they should contact the Schemes Prom otion G roup who will arrange access.

Fraud control

ComSuper maintains a fraud control program. A brief description of activities conducted during the year is provided at page 72. A dditional information is available upon request.

Use o f consultants

ComSuper uses consultants when in-house expertise is inadequate to meet some particular need. ComSuper has not developed its own policy in relation to the use of consultants but complies with the Finance Regulations, PSC and DAS guidelines covering their use.

Purchasing

Details of purchases by ComSuper during the year, including exceptions to the norm al tendering process and instances of late gazettal are available from ComSuper upon request.

Property usage

ComSuper is located in the C am eron Offices at Belconnen and rents additional storage space in the Mitchell Industrial Estate. All accom modations are rented.

Full details of property usage, including energy consumption and vehicle usage is available upon request.

Glossary AAS A ustralian A ccounting D FR D B Act D e fe n c e F o r c e R e tir e m e n t a n d

Standard D e a th B e n e fits A c t 1 9 7 3

A A T A dm inistrative A ppeals D PP D irecto r o f P ublic P rosecutions

T ribunal E A P E m ployee A ssistance Program

AD (JR ) A ct A d m in is t r a t iv e D e c is io n s E EO E qual E m ploym ent O pportunity

(J u d ic ia l R e v ie w ) A c t E X PO E xternal P ersonnel O fficers

1 9 7 7 FO I F reedom o f Inform ation

A G PS A ustralian G overnm ent FO I A ct F r e e d o m o f I n fo r m a tio n A c t 1 9 8 2

Publishing S ervice G A A G raduate A dm inistrative A ssistant

A M F A dvance to the M inister for G BE G overnm ent B usiness E nterprise

Finance G U I G raphical U ser Interface

AN A O A ustralian N ational ID Industrial D em ocracy

A udit Office IT Inform ation T echnology

A PG A ustralian P ro p erty G roup JA P S T C Joint A PS T rain in g C ouncil

A TS A ustralian T raineeship LAN L ocal A rea N etw o rk

System M M D M iddle M anagem ent D evelopm ent

BCC B enefits C lassification

C ertificate

M SBS M ilitary S uperannuation &

B enefits Schem e

BCS B enefits C ontrol System M SB Board M ilitary Superannuation &

C FM C om m onw ealth F unds B enefits B oard o f T rustees N o. 1

M anagem ent L im ited N ESB N on-E nglish-speaking background

C M A PS C onfidential M edical and O H & S O ccupational H ealth & Safety

Personal Statem ent O SSA O ccupational S uperannuation

C om Super C om m onw ealth Superannuation S tandards A ct

A dm inistration PN G Papua N ew G uinea

C R F C onsolidated R evenue Fund PSC Public Service C om m ission

CSS C om m onw ealth

Superannuation Schem e PSS Public S ector S uperannuation

Schem e

C SS A ct S u p e r a n n u a tio n A c t 1 9 7 6 PSS A ct S u p e r a n n u a tio n A c t 1 9 9 0

CSS B oard C om m onw ealth

S uperannuation B oard o f PSS B oard C om m onw ealth Superannuation B oard o f T rustees N o. 1

T rustees N o. 2 PSU Public S ector U nion

C ST C areer S tart T raineeship PW D People W ith D isability

D C M C D isability C laim s

M anagem ent and

RAC R econsideration A dvisory

C om m ittee

C ounselling Service RBO R etirem ent B enefits Office

D FR B D efence F orce SA Special A ppropriation

R etirem ent B enefits SAS S uperannuation A dm inistration

D FR B A ct D e f e n c e F o r c e s R e tir e m e n t System

B e n e fits A c t 1 9 4 8 SES S enior E xecutive Service

D FR D B D efence Force T Q M (T otal) Q uality M anagem ent Section

R etirem ent & D eath Benefits

T T Y T elephone T y p ew riter Facility

127

Index

accommodation, 38, 76 accounting procedures devolution of some functions, 76 improvements undertaken, 70

limitations of com puterised systems, 69 address of Comsuper, iv administration of the Commonwealth

Superannuation Scheme, (CSS), 5-14 Administrative A ppeals Tlibunal (AAT) appeals, 22, 24

D FD R B appeals, 60-61 reconsideration of decisions, 12, 13, 50 significantdecisions, 13-14 A uditor-G eneral

qualification of reports, 33, 68-70 audits qualifications, 29, 33, 68-70 Australian Estate M anagem ent (A EM )

review of leasing agreement, 76 Australian National Audit Office (ANAO) assistance with preparation of

financial statements, 70

benchmarking, 75-76 Benefit Classification Certificate (BCC), 9 benefits

CSS pensioners, 8 overpaid benefits, 44 payments, 31, 44 branch operations see also individual branches staffing

information, 87 Business Analysts group, 31 Business Liaison Unit, 71-74 Business M anagem ent Branch, 35-38

business accounts, 36 business liaison, 36-37 property & services, 38 quality management, 37 Business O perations Branch, 29, 40 Business Systems Branch, 33-34, 65

Civilian M em ber Services (CMS), 29 provision of STPs, 30 Client Communications Branch, 25-28, 38 client services, 26-27, 32, 44, 45, 47

complaints, 85 evaluation, 33-34 legal practitioners, 72

commercial style practices, 75 Commissioner decision-making powers, 79 external review of decisions, 12-13

obligations, 5 overview, xi-xii reconsideration of decisions, 11-12 responsibilities, 1 Commonwealth Funds Management

Limited (CFM ), 25 Commonwealth Superannuation Scheme (CSS), 1 administration, 25, 39 advisings, 24

contributions, 8, 44 invalidity retirem ent, 46 review of decisions, 23 transactions, 5-6 communications, 25, 48

EXPO, 72-74 com puter systems, 31, 33-34 Confidential M edical and Personal Statem ent (CMAPS), 30 consultants

information technology services, 33 consultative arrangements, 80 contributions, 8

collection, 44 recording, 44-45 software & databases, 65 contributors exits from CSS, 7-8 classification, 9

former contributors, 9-10 statistics, 40, 51 C orporate Plan of Comsuper, 18 corporate functions devolution, 76 corporate goals

impediments to achievement, xi

129

130 Index

corporate services delivery, 63-76 correspondence turnarounds, 47 cost recovery, 35, 47, 71-72 counselling services to members, 27

data contributions databases, 65 database improvement, 31 database inadequacies, 43 information integrity, 44-45 on-line diagnostics, 31-32 debtors, 44

determ ination, 44-45 decisions & reconsideration requests, 11-14 Defence Force R etirem ent and D eath Benefits

(D FR D B ) Authority, 56 administrative assistance, ix, I, 51 com puter systems, 65 review & reconsideration of decisions, 23, 24,

50, 59-61

Defence Force R etirem ent Benefits (D FR B) Scheme, 1 administrative assistance, ix review of decisions, 23 Defence Forces

decision-making powers of the authorities, 79 funding of schemes, 52 retrenchm ents, 56 review of payments process, 31 schemes delivery, 51-61

prim ary administration, 55-57 reconsideration & review, 59-61 statistics, 51 D ept of Defence funding of defence force schemes, 52 D ept of Finance advisings, 24 cost of com puter platform, 33 negotiations on accommodation, 76 Disability Claims Management and Counselling Service (D CM C), 25, 46 disputed decisions, 11-12

efficiencies see also quality management benefit payments, 31 benefits of EX PO , 72-74

com puter systems, 65 costs of medical examinations, 30 improved database, 31 level of client service, 32 military & Defence Force payments, 31 reduction in costs of internal review, 22-23

use of on-line diagnostics, 31 employer assistance with correct information, 44­ 45 Equal Employment O pportunity (E E O ) statistics.

90

training of target groups, 68 External Access for Personnel Officers (EX PO ), 37, 45, 65, 72-74 external review, 50, 59, 60-61

family law inquiries, 47 Federal Court appeals, 12- 13 A A T, 22, 24

basis of appeals, 23-24, 50 D FD RB, 60-61 significant decisions, 13-14 fees charged, 27, 47 Financial resources funding arrangements, 71 Program 1, 41, 43, 49 Program 2, 52, 55, 59 Program 3, 64 financial statem ents, 92-118 assistance from ANAO, 70 glossary of terms, 119-22 qualification by the A uditor-G eneral, 68-70 fraud control, 72 Freedom of Information, 79-82 funding & staff of ComSuper, 17 future strategy, 18

glossary of terms, 127 government business enterprise (G BE) contributor transfers, 6, 8

human resoulce management, 27-28, 38, 66-68 benefits of EX PO , 72-74 graduate recruitm ent, 66 perform ance pay, 66 post-separation employment, 66 recruitm ent, prom otion & separation statistics,

88-89

reduction in staffing levels, 66-67 reduction of absenteeism, 74-75 SES movements, 66 staff counselling services, 83 staffing resources, 87-90

Program 1, 41, 43, 49 Program 2, 52, 55, 59 Program 3, 64 training guarantee, 67-68 training of E E O target groups, 68 training of staff, 41-42, 47

Index 131

incapacitated officers pre-assessment payments, 10 Industlial Relations Commission appearances, 27 industlial democracy, 85 Industry Standards Section, 70-71 information

see also data information statem ents, 47-48 integrity, 44-45 seminar program, 47, 48 infolmation technology (IT), 33-34, 64-66

costs of modernisation, 34, 66 need for system replacem ent, 69 Interactive Voice Response (IV R ) telephone service, 26, 27, 32

internal reconsideration, 49-50, 59, 60-61 invalidity retirem ent, 46-47 see also DCM C, 10-11, 25 partial invalidity pensions, 11

review of pensions, 11 suspensions due to earnings, 11 suspensions due to restored health, 11

Legal Service Fee, 47 legislation & advisings, 24, 48 letter of transmittal, iii litigation see Federal Court Local A rea Network (LAN), 33, 66 lump sum payments, 9

medical examination of new members, 30 mem bership of CSS, 6 restructuring, 65 Military Superannuation and Benefits Scheme

MSBS), 57 administrative assistance, ix, 1, 25, 51 appeals against decisions, 23, 61 com puter systems, 65

funding, 52, 57 military mem ber services review of core process for payments, 31

name change of Comsuper, 17

objectives of Comsuper, 35 O ccupational H ealth & Safety (OH& S), 83 occupational superannuation schemes, 39-41 major activities, 40-41

prim ary administration, 43-48 reconsideration & review, 49-50 resources, 41 organisational structure of ComSuper, 19-21 outstanding decisions for reconsideration, 50

Papua New Guinea (PN G ) schemes, 1, 39 review of decisions, 23-24 pensions see also individual types o f pensions,

payments to spouses of deceased pensioners, 44 pensioner services group, 32 receipts to CSS pensioners, 8-9 records, 45 statistics, 40, 51 suspension, 47 variations, 32 perform ance pay, 66 post-separation employment, 66 pre-assessment payments, 10

preservation of benefits, 9 Program 1 see occupational superannuation schemes Program 2 see Defence Force, schemes delivery Program 3 see corporate services delivery program performance, 39-76

see also individual program s Property and Services group, 38, 76 Public Sector Superannuation (PSS) administration, 25, 39

advisings, 24 contributions, 44 introduction, 6 invalidity retirement, 45 medical examination of new members. 30 Transfer Value payments, 29-30 publicity & public relations, 26-27, 80-81

quality management (TQ M ), 35, 37-38, 74-76

reconsideration requests, 11-12 ComSupcr performance indicators, 22 reconsideration & review, 49-50 Defence Force schemes, 59-61 records maintenance, 45

see also data requirem ents of the annual report, 123-25 restructuring within Com super, 19 Retirem ent Benefits Office (RBO)

change of name, 17 retrenchm ents, 56 costs, 72

effect on CSS contributor exits, 7-8 pensions commenced, 8-9 redundancy activity, 26-27 Review & Legal Branch, 22-24 reviews

administrative review of Comsuper, 22 basis of Federal Court appeals, 23-24

132 Index

costing methodology, 72 internal & external review of decisions, 12-13, 23, 49-50

invalidity pensions, 11 leasing agreem ent with A EM , 76 pensioner services group, 32 reconsideration & review, 49-50

Defence Forces schemes, 59-61 risk management, 35, 37, 72, 75 roll overs, 32

Schemes Prom otion Group, 26, 48 social justice, 41-42, 53 staff see hum an resource management standards, 70-71 Statement of Term ination Payment (STP), 30, 32 statistics, CSS. 4, 40

civilian superannuation schemes, 4-0 complaints, 85 EEC), 90 staff resources, 87-90

TQM see quality management training guarantee, 67-68 Transfer Values payments, 29-30

unions dispute with Commonwealth Public Service U nion (CPSU), xii, 28 user pays, 71-72