Our focus for performance this year targeted:

• Optimised investment strategy
• Digital transformation
• Meaningful stakeholder engagement
• Client education
• Workforce capability.

Investments

It was a year of change. Coal LSL worked closely with Frontier Advisors, its asset consultant, to review the strategic asset allocation and the combination of investment managers in each asset class. Most of the changes were put in place during the first half of the financial year when investment markets, especially growth assets, generated strong returns. When market volatility spiked sharply in response to COVID-19 being declared a pandemic, resulting in the lock-down of economies globally, the portfolio benefited from being well-diversified.

As investment performance eroded during the first quarter of 2020, the Board’s Trigger Action Response Plan was activated, resulting in frequent meetings of the Investment Committee to assess the portfolio for required changes.

During the second quarter of 2020 equity markets rebounded sharply, which enabled the portfolio to generate a small positive return of 0.7% for the year ended 30 June 2020.

Despite the moderate portfolio return for the year, the long-term performance of the portfolio remains strong. The average annual returns over 3, 5 and 8 years ending June 2020 were all above the return objective of CPI + 3% p.a.

The portfolio achieved the following annual returns in the last five years (ending 30 June):

Operational activities

During 2019–20 we focused on building capability to enable delivery on our purpose of connecting employers and employees with their long service leave.

This involved continued work on our digital transformation; in particular, enhancements to our administration platform and core services to facilitate automated processing of employer Levy Advice forms. Levy reporting is a complex administrative process and its automation requires data accuracy; however, there are inaccuracies in a high number of the levy returns we receive. Work continues in reducing the instances of data inaccuracies through ongoing efforts in employer engagement and education.

We increased capacity through strategic expansion of our workforce numbers to ensure service delivery was met.

Our annual performance statements detail our achievements over the past financial year.

Stakeholder and client activities

Employer Compliance

Compliance engagement with employers of eligible employees was a major focus of 2019–20. The Client Engagement team held more than 700 meetings with non-compliant employers during the year, representing a 267% increase in engagement activity compared to last year. This strong engagement focus resulted in a further 218 new employer registrations, which is a 48% increase in registrations compared to the previous year.

Stakeholder Engagement

In 2019–20 we continued to forge stronger relationships with industry associations and employee groups, with the aim of increasing awareness and understanding of our scheme. Through presentations, event attendance and face-to-face (pre-COVID-19) meetings, we continued to educate our industry stakeholders as well as better understand their challenges to improve our service delivery.

We also implemented an employer relationship program to build on our interactions with employers. The aim of this program is to deliver on our vision to be a leader in service and provide employers with relationship managers to help them with improved interactions with Coal LSL. During the year we onboarded 211 new employers and conducted more than 1,200 proactive engagements with employers relating to their onboarding and relationship management.