Employee benefits
E1: Employee benefits
Policy and measurement
Liabilities for short term employee benefits and termination benefits expected within twelve months of the end of the reporting period are measured at their nominal amounts.
Other long term employee benefits are measured as net total of the present value of the defined benefit obligation at the end of the reporting period.
Leave
The liability for employee benefits includes provision for annual leave and long service leave.
The liabilities are calculated on the basis of employees’ remuneration at the estimated salary rates that will be applied at the time the leave is taken, including Finance’s superannuation contribution rates to the extent that the leave is likely to be taken during service rather than paid out at termination.
Separation and redundancy
Provision is made for separation and redundancy benefit payments. Finance recognises a provision for restructuring when it has a detailed formal plan for the restructuring and has informed those employees affected that it will carry out the restructuring.
Superannuation
Finance’s staff are members of the Commonwealth Superannuation Scheme (CSS), the Public Sector Superannuation Scheme (PSS), the PSS accumulation plan (PSSap) or other superannuation funds held outside the Australian Government.
The CSS and PSS are defined benefit schemes of the Australian Government. The PSSap is a defined contribution scheme. The liability for defined benefits is recognised in Finance’s administered statements and reported in Note C3: Superannuation.
Finance makes employer contributions to the employees’ defined benefit superannuation scheme at rates determined by an actuary to be sufficient to meet the current cost to the Government. Finance accounts for the contributions as if they were contributions to defined contribution plans.
Key judgements and estimates
Leave
The liability for long service leave has been determined by reference to standard parameters issued by the Department of Finance. The estimate of the present value of the liability takes into account attrition rates and pay increases through promotion and inflation.
Leave liabilities for employees engaged under the MOP(S) Act are calculated with reference to an actuarial assessment. The estimate of the present value of the liability takes into account attrition rates and pay increases through promotion and inflation.
Separation and redundancy
A provision for severance payments is made for employees engaged under the MOP(S) Act in the event their employment is terminated, other than through resignation. These are measured as the defined benefit obligation adjusted for future salary increases discounted back to present value using yields on Government bonds.
Post-employment benefits
Provision is made for certain entitlements for former Prime Ministers, including staff, office and vehicle costs. The liability is calculated with reference to an actuarial assessment for each former Prime Minister individually where future recurrent expenditure assumptions are set having regard to historical data adjusted for inflation.
E1.1 Employee benefit expenses
Departmental |
Administered |
|||
30 June |
30 June |
30 June |
30 June |
|
2018 |
2017 |
2018 |
2017 |
|
$'000 |
$'000 |
$'000 |
$'000 |
|
Wages and salaries1 |
121,933 |
127,734 |
223,568 |
187,882 |
Superannuation expense |
||||
Defined contribution plans |
10,848 |
13,991 |
33,569 |
30,247 |
Defined benefit plans |
12,575 |
10,714 |
5,677 |
7,562 |
Leave and other entitlements |
15,580 |
12,538 |
20,021 |
17,870 |
Increase (decrease) in post-employment benefits liability |
- |
- |
(3,934) |
(75,596) |
Separations and redundancies |
7,312 |
2,952 |
5,315 |
10,296 |
Other employee expenses |
229 |
689 |
14,520 |
16,838 |
Total employee expenses |
168,477 |
168,618 |
298,736 |
195,099 |
1 Includes salaries and related benefits for Parliamentarians’ from 1 January 2018. Prior to this payments were administered by the Australian Public Service Commissioner (APSC).
E1.2 Employee provisions
Departmental |
Administered |
|||
30 June |
30 June |
30 June |
30 June |
|
2018 |
2017 |
2018 |
2017 |
|
$'000 |
$'000 |
$'000 |
$'000 |
|
Employee provisions |
||||
Leave |
56,468 |
58,403 |
41,744 |
36,185 |
Separation and redundancies |
6,011 |
- |
23,475 |
24,070 |
Post-employment benefits |
- |
- |
170,646 |
176,754 |
Total employee provisions |
62,479 |
58,403 |
235,865 |
237,009 |
Visit
https://www.transparency.gov.au/annual-reports/department-finance/2018/part-5-financial-statements/employee-benefits