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People and relationships

This section describes a range of employment and post employment benefits provided to our people and our relationships with other key people.

4.1 Employee provisions

Employee provisions

2020

2019

$'000

$’000

4.1: Employee provisions

Leave

41,340

36,362

Other employee provisions

8,357

7,800

Total employee provisions

49,697

44,162

Accounting policies

Liabilities for ‘short-term employee benefits’ and termination benefits expected within 12 months of the balance date are measured at their nominal amounts.

All other long-term employee benefits are measured as the net total of the present value of the defined benefit obligation at the end of the reporting period minus the fair value at the end of the reporting period of plan assets (if any) out of which the obligations are to be settled directly.

Leave

The liability for employee benefits includes provision for annual leave and long service leave.

The annual and long service leave liabilities are calculated on the basis of employees’ remuneration at the estimated salary and superannuation rates that will be applied at the time the leave is taken during service rather than paid out on termination. The estimate of the present value of the liability takes into account attrition rates and pay increases through promotion and inflation.

Separation and redundancy

Provision is made for separation and redundancy benefit payments in cases where APRA has developed a detailed formal plan for the terminations, and has informed those employees affected that it will carry out the terminations.

Superannuation

Certain employees of APRA are members of the Commonwealth Superannuation Scheme (CSS) and the Public Sector Superannuation Scheme (PSS). The CSS and PSS are defined benefit schemes for the Australian Government. The liability for defined benefits is recognised in the financial statements of the Australian Government and is settled by the Australian Government in due course. This liability is reported in the Department of Finance's administered schedules and notes.

APRA makes employer contributions to the employees' superannuation scheme at rates determined by an actuary to be sufficient to meet the current cost to the Government. APRA accounts for the contributions as if they were contributions to defined contribution plans. APRA also makes employer contributions to the Reserve Bank Officers’ Superannuation Fund and to State‑based superannuation schemes for former employees of the Reserve Bank of Australia and State‑based regulators respectively. These are defined benefit schemes and the liability for the defined benefits are recognised in the financial statements of the relevant fund.

For all other employees, employer contributions are made to the PSS accumulation plan or other superannuation (accumulation) funds as nominated by the employee.

Significant accounting judgements and estimates

The employee leave provision has been determined by reference to standard parameters provided by the Department of Finance as well as an estimate of the proportion of leave likely to be taken in-service as compared to taken on termination. The leave taken was analysed given the current pandemic and reviewed against the estimated leave to be taken and factored into the calculation. The salary growth rate assumption used in the calculation was 3.5%.

4.2 Key management personnel remuneration

Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the entity, directly or indirectly, including any director (whether executive or otherwise) of that entity. In 2019/20 APRA has determined the key management personnel to be the Cabinet Ministers and the APRA Members.

The key management personnel remuneration reported here excludes the remuneration and other benefits of the Cabinet Ministers. Their remuneration and other benefits are set by the Remuneration Tribunal and are not paid by APRA.

The total number of key management personnel included in the table below are: 4 (2019: 4).

Key management personnel

2019/20 APRA key management personnel

Position

Period

Wayne Byres

Chair

Full Year

Helen Rowell

Deputy Chair

Full Year

John Lonsdale

Deputy Chair

Full Year

Geoff Summerhayes

Member

Full Year

Key management personnel remuneration is reported in the table below:

2020

2019

$'000

$’000

Short-term employee benefits

2,847

2,577

Post-employment benefits

253

213

Other long-term benefits

182

284

Total key management personnel remuneration expenses

3,282

3,074

4.3 Related party disclosures

Related party relationships
APRA is an Australian Government controlled entity. Related parties to APRA are the key management personnel, including Cabinet Ministers and other Australian Government entities.

Transactions with related parties
Given the breadth of Government activities, related parties may transact with the government sector in the same capacity as ordinary citizens. Such transactions include the payment or refund of taxes, receipt of a Medicare rebate or higher education loans. These transactions have not been separately disclosed in this note.

Refer to Note 4.1 Employee provisions for details on superannuation arrangements in the Commonwealth Superannuation Scheme (CSS), the Public Sector Superannuation Scheme (PSS), and the PSS accumulation plan (PSSap).

APRA transacts with other Australian Government controlled entities consistent with normal day-to-day business operations provided under normal terms and conditions, including the payment of workers compensation and insurance premiums. These are not considered individually significant to warrant separate disclosure as related party transactions.