Organisational objectives, indicators and outputs
The Authority had one output associated performance measure with the 2020–21 Victorian Budget as set out in the 2020–21 Budget Paper No. 3 Service Delivery. This is shown below.
| Performance measures | Unit of measure | 2020/21 actual result | 2020/21 target |
|---|---|---|---|
| Workers registered under the Portable Long Service Benefits Scheme |
Number | 177,960* | 75,000 |
* The 2020–21 actual is higher than the 2020–21 target due to increased proactive activity by the Portable Long Service Authority to register employers.
Business Unit reports
Governance, Risk, Secretariat and Legal
In the past year we have achieved our goal of providing strategic, sound and constructive legal and governance advice to the Authority, Registrar and internal business units.
We have supported the Governing Board, along with the Audit and Risk Committee, to make astute and prudent decisions, ensure assurance through our strategic internal audit program and effectively monitor our risks.
The production of a comprehensive risk management framework and a detailed integrity and policies framework underpins the foundations of the Authority’s corporate governance.
We have also managed an effective corporate planning process, performance management framework, along with ensuring measures are in place and monitored to provide public accountability and transparency.
The COVID-19 pandemic has had a significant impact on the Authority. The Authority’s approach to responding to the pandemic was driven by our business unit resulting in the Authority successfully ensuring operations continued unabated.
The Legal team supports the Authority by educating business units on changes to the regulations associated with our Act and assisting with the implementation of operational changes arising from these developments.
It has also reviewed and provided advice on draft amendments to the Act, with changes to come into effect on 1 July 2021 and has continued negotiations with portable long service entities in other states to establish reciprocal agreements.
We developed the Authority’s response to the Ministerial Statement of Expectations while fostering productive working relationships with other regulators and leave authorities across Australia.
The challenge ahead is to develop accessible and consistent messaging internally and externally about the scope of the scheme for employers and workers, to support a strengthened compliance and enforcement approach, along with ensuring management and staff are given effective legal advice in response to issues as they arise.
Financial Services
A key highlight for the Finance business unit this year has been the smooth transition of our business systems.
We are operating more efficiently and have also reduced costs by moving from external system providers to managing payroll and financial systems internally.
We have also enhanced our budgeting and forecasting processes as well as implemented key financial policies and procedures.
On an extremely positive note, the Authority is managing almost $114 million in capital, which will fund the future long service benefits of registered workers.
Our investment of funds with the Victorian Funds Management Corporation (VFMC) is returning a healthy 6.54% from February 2020 and is currently sitting at 14.2% for the past financial year.
The challenge ahead for the Finance business unit is to increasingly use live data to validate key assumptions behind actuarial modelling, adapt to changes in regulations and the development of new information technology which will improve the Authority’s business registry system.
As the Authority has flourished, the Finance business unit has met every challenge with aplomb.
Client Service and Operations
The Client Service and Operations business unit is comprised of two teams.
The Customer Service and Education (CSE) team assesses applications for registration from employers and workers and determines whether they should be registered with the Authority. Once registered, the CSE team members are the main point of contact for employers and workers, assisting them with quarterly returns and enquiries.
The Compliance and Enforcement team works with employers to ensure they fulfil their obligations and financial commitments to the Scheme.
The challenge for all teams is to implement a range of strategies to ensure that employers and workers are registered to the full extent of the Scheme’s scope and that there is accessible and consistent messaging about the scope of the scheme.
We will further develop our processes to assist employers to complete accurate and timely returns and to identify where workers have been omitted from returns. In the coming year our compliance and enforcement strategy will be enhanced.
The business unit has once again shown resilience and professionalism by adjusting to remote working, children learning from home and changing travel restrictions.
The amount of calls Client Service and Operations has managed over the past year is staggering for such a developing Authority. We have received nearly 10,000 inbound calls in the past year and are actively engaged with the 177,960 workers and 2,540 employers registered with the Authority.
We have seen the continual development and improvement of processes and business systems employed by the business unit, often through the feedback that we receive from employers and workers.
The impact of COVID-19 has presented many challenges. It has led to staff moving to remote working environments.
There is no doubt there have been challenges in the past year for the business unit, highlighted by the extraordinary increase in the number of workers registrations and the impact of COVID-19 on the workplace. The business unit has once again shown resilience and professionalism.
Facilities, Information and Technology
As the Authority evolves, we have ensured the organisation remains flexible and agile by introducing new technology to improve operations.
A major project for us has been the successful installation of the Genesys phone system for the Client Services and Operations Unit, based in Bendigo.
We have also been involved in the implementation of a new HR/payroll system and risk management software to help streamline operations.
The Facilities team has also overseen the establishment of new office space to cater for the Authority’s growth in Bendigo and Melbourne CBD. The fit-out of both office areas occurred seamlessly.
The construction and design of the Authority’s new intranet has also been an important element of the business unit’s activities during the past 12 months. We have been working closely with all the business units to develop the site.
The aim is to make the Authority’s intranet simple to navigate and with easy access to a wealth of information provided by each business unit.
The transition to staff working remotely due to the COVID-19 pandemic has occurred without incident. We have provided around-the-clock support and technical expertise to the various business units to ensure no interruption to the Authority’s operations.
The challenge for us is to keep investigating and introducing new information technology products to further support the successful operations of the Authority.
People and Culture
The People and Culture business unit has focused on ensuring our workforce has the right skills, capabilities and as an organisation, the Authority has a healthy culture where people feel happy and productive.
We believe people are our greatest asset and it’s our job to support their growth and development within the Authority.
As at 30 June 2021, the Authority has 47 staff with more than 90 per cent from the Greater Bendigo and surrounding areas as part of its commitment to invest in regional Victoria. In the past year, we have been involved in the recruiting process for 21 positions with the Authority.
The COVID-19 pandemic has presented many challenges. We made the swift transition of our staff to remote working. This meant we had to adapt the ways in which we supported staff to make sure everyone felt connected, informed and that everyone’s mental health and well-being were cared for.
We conducted 155 one-on-one check-ins with staff members over the past year to speak with staff about their health, well-being and to ensure they felt supported by the Authority while working remotely.
There were various ways we went about this, including giving staff access to a virtual gym, ‘ergonomics at home’ virtual training sessions and webinars to cope with the onset of loneliness and isolation.
The Victorian Public Service annual survey the ‘People matter survey’ conducted last October found that 96% of staff found the
Authority inspired them to do the best in their job, motivated them to help achieve its objectives and 92% thought it was a good place to work.
Communications and Engagement
This year, the Communications and Education business unit leveraged off the previous year’s comprehensive communications and engagement activities to propel the Authority’s brand and presence among the target audiences and stakeholders.
Following the successful 2019 advertising campaign, the Authority delivered two further campaigns focusing on raising awareness among employers and workers with employers receiving a stronger compliance message. The campaigns were delivered through digital and radio advertising in metropolitan and regional Victoria.
Content on the Authority website was enhanced resulting in an increase of over 10,000 unique visitors from the previous year, while our social media channels including Facebook and LinkedIn grew by 134% and 113% respectively. The fortnightly email newsletter moved to monthly distribution in February 2021 and averaged an open rate of 40 – 50% which is significantly above the industry standard. Our digital presence continues to be our main channel in raising awareness of the Authority and moving forward, will play a key role in driving traffic to our website.
COVID-19 affected our proposed participation in trade shows and events, however online speaking opportunities were made available to the Authority throughout the year. Since October 2020, the Research and Education team within the business unit held ten general online webinars for 300 external stakeholders, as well as sector specific online sessions for 130 employers.
The Communications and Engagement business unit continued to work in concert with the Operations business unit supporting tactical initiatives and developing targeted communication to address issues and needs identified through data and intelligence gathering.
A challenge ahead is to support accessible and consistent messaging about the broad scope of the scheme for employers and workers and to support our strengthened compliance and enforcement approach.
As our scheme matures there are also opportunities to support our stakeholders by providing access to data about our industries and their workforce.
Meet Aimee Sparnenn
The journey to Bendigo and working at the Portable Long Service Authority has taken several interesting twists and turns for Aimee Sparnenn.
It begins with Aimee growing up in Melbourne’s outer eastern suburbs and the lure of the city’s vibrant hospitality industry. An offer from a friend to work in a café kickstarted her working life.
“It was a fun job straight out of high school,” said Aimee. “There’s something very satisfying ensuring customers have a great experience and I also enjoyed working with a wide variety of people in hospitality,” she added.
The next step was more geographically complicated. “After spending time in frontof- house positions I decided to transition into becoming a chef. I had always loved cooking and it seemed a natural progression.”
Uluru is about 2,000 kilometres from Melbourne and is far removed from most peoples’ everyday work experience. The large sandstone formation, which happens to be one of the most recognised natural wonders of the world, is right next door to the Ayers Rock Resort. The resort had eleven restaurants, cafés and bars for a budding chef to ply their passion for food.
Aimee accepted a position as an apprentice chef at the resort.
It was hours of gruelling shift work in big kitchens and an even bigger learning curve into the machinations of the hospitality industry on a grand scale. “There wasn’t a great deal of time to explore the desert,” said Aimee. Most down time was spent at the staff bar or pool after a long day “which left you with little energy for anything else,” she added.
After a year in the surreal surrounds of Uluru and the Ayers Rock Resort, Aimee decided to return to Melbourne where she continued her studies at the William Angliss Institute and cooked at a popular Richmond café.
Life took a different turn when Aimee’s partner, who was also a chef, accepted a job in food technology and product development based in Brisbane.
Packing their bags, Aimee decided it was time to try something different after growing tired of long hours and demanding shift work in hospitality.
With good communication skills and an analytical mind, Aimee took up a position with Brisbane City Council as a field-based compliance officer. She investigated everything from serious dog attacks, interference with protected vegetation, illegal dumping, breaches of the Food Act or public health matters relating to hoarding or asbestos.
After five years in Brisbane, Aimee and her partner decided to come back to Victoria, but they wanted to experience living in a regional area rather than the confines of metropolitan Melbourne.
While in Brisbane, Aimee started searching for a job in Victoria and found an advertisement on the Victorian Government jobs website for a Customer Service and Compliance Officer position with the Authority in Bendigo. Her communication skills would once again prove beneficial. She was interviewed and began work with the Authority in May this year.
The role involves making sure employers comply with their obligations under legislation introduced in 2019.
Aimee is adapting from a council with eight-thousand employees to a much smaller government authority.
As Aimee says, “there are plenty of upsides working with a fresh and new organisation like the Portable Long Service Authority that wants to make a positive financial impact on the lives of workers”.
That’s quite a change from investigating dog attacks and hoarders in Brisbane.
Delivering on our objectives
The Authority’s Corporate Plan 2020–23 sets out the Authority’s short and medium-term priorities along with its key measures for success.
Below is an overview of the activities contributing towards these objectives.
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During the financial year, 13,951 quarterly returns were issued to registered employers:
The Authority adjusted 5,403 quarterly returns due to incorrect information being submitted by the employer.
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$83.9 million invoiced. $3.4 million outstanding at 30 June 2021 of which $0.8 million is more than 30 days overdue. $113.8 million invested with Victoria Funds Management Corporation (VFMC) in the Balanced Portfolio. |
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Working from home
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COVID-19 response
The COVID-19 global pandemic has for another year had a deep impact on the lives of all Victorians.
Working remotely has created significant challenges for the Portable Long Service Authority. It has been difficult to maintain internal cohesion and consistency of messaging to employers and workers in this environment.
Despite this the Authority has ensured services for registered employers and workers have continued unimpeded in this challenging operating environment.
Our Customer Service and Education Officers have responded to thousands of enquiries while also conducting online training sessions to employers in the three covered industries.
We have been proud of the way our team has risen to the challenges faced as a result of the COVID-19 pandemic, including successfully adapting to working from home.
Every effort has been made to ensure our staff members are comfortable with their rapidly changing work conditions.
The Continuity Leadership Team has been meeting to update planning and the Authority’s response to the challenges presented by the pandemic.
The People and Culture business unit have maintained close contact with staff, monitoring well-being and directing our people to the Employee Assistance Program.
Other measures have been put in place to maintain and monitor the health of all staff. There are regular group video conferences and individual check-ins to provide conversation, comfort and maintain morale.
Our staff members have been encouraged to receive a COVID-19 vaccination if they are eligible.
We have also implemented an electronic desk booking system for our Bendigo and Melbourne offices to manage workplace capacity, in line with social distancing requirements. The system, known as ‘Robin’, allows staff to plan when they can work in the office on any given day.
As part of our response to the rapidly changing situation, staff have been issued with the latest communications and information technology enabling them to successfully continue their important work from any location.
The Authority and its people have undergone a transformation during the pandemic. We are far more agile and adaptive to the many challenges before us.
Those strengths have ensured the thousands of workers and employers registered with the Authority continue to receive the best possible service and advice during these difficult times.
Financial performance
Five-year financial summary
The Authority commenced operations on 18 March 2019, therefore only one year of comparative information is available.
Table 2: Two-year financial summary
| Summary | 2020-21 ($,000) | 2019-20 ($’000) | 2018-19 ($’000) |
|---|---|---|---|
| Total income from transactions | 106,525 | 62,419 | 1,820 |
| Total expenses from transactions | 95,643 | 53,146 | 301 |
| Net result for the period | 10,882 | 9,273 | 1,519 |
| Net cash flow from operating activities | 75,929 | 40,387 | - |
| Total assets | 159,415 | 59,740 | 2,351 |
| Total liabilities | 137,741 | 48,948 | 832 |
| Net assets | 21,674 | 10,792 | 1,519 |
Current-year financial performance
The 2020–21 financial year is the Authority’s second full year having only commenced on 18 March 2019.
The Authority administers three schemes which provide portability of long service leave benefits for registered workers in the community services, contract cleaning and security industries in Victoria.
The Authority levies registered employers for workers in the covered industries in accordance with the Act and the Regulations and makes payments for benefits taken.
In the 2020–21 financial year, the Authority achieved a net result for the year of a $10.9 million surplus compared to $9.3 million surplus in 2019–20.
Levy contributions from employers and contractors based on levy rates set by the Governing Board was the largest source of income from transactions. This was achieved through 177,960 (114,137 2019-20) registered workers with 2,540 (1,914 2019-20) registered employers completing four quarterly returns during the year.
The Authority continued investing with the Victoria Funds Management Corporation (VFMC) Balanced Fund and transferred a total of $81.3 million additional investments during the year, increasing the total investments to $113.8 million. Investment income increased substantially to $5.7 million as the markets recovered from the COVID-19 sell-off the previous year. The Balance Fund also outperformed the benchmark resulting in a net gain of $6.8 million on financial instruments during the year.
A total of $0.7 million in Government grants was received during the year to continue the assistance with the establishment of the Authority, with a final payment of $0.2 million to occur next year.
During the year the Authority appointed Deloitte Consulting Pty Ltd as the new actuary to calculate the valuation of the portable long service benefit expense which increased to $136.3 million as at 30 June 2021.
Administration costs totalled $6.7 million with $4.7 million relating to employee benefits expense and $2.0 million for information technology costs, office expenses, professional services, promotion costs and internal and external audit fees.
Financial position balance sheet
The Authority ended the financial year with net assets of $21.7 million and a solvency ratio of 115.7%.
Cash at bank totalled $9.4 million, which included scheme funds collected and not transferred to VFMC investments and the Administration charge received to fund the Authority but not spent.
The Authority increased the investment funds with VFMC to $113.8 million and accrued $5.2 million of investment income due in July 2021 and $27.2 million for the fourth quarter employer levy contribution payable on 31 July 2021.
The Authority’s actuary calculated the long service leave valuation which totalled $136.3 million for portable long service benefit expense based on 177,960 workers as at 30 June 2021.
Operating cash flows
Net cash flow from operating activities was positive for the year totalling $75.9 million, which included $81.7 million of receipts from employers for their worker levy contributions and $1.2 million from Government to continue the establishment of the Authority.
The Authority transferred $81.3 million to VFMC Balance Fund and received $1.1 million of proceeds from these investments during the year.
Investment performance
The Governing Board approved the Authority’s investment strategy following workshops facilitated by VFMC based on an analysis of desired investment returns against investment risk appetite. Investment manager performance is actively monitored by management of the Authority.
The investment objectives of the Authority at 30 June 2020 are:
- Return: To achieve an average return objective of at least CPI + 3.0% p.a. with greater than 60% probability over a rolling 10‑year period; and
- Risk: To limit the likelihood of a negative annual return to no more than one year in every five years and when negative returns occur, for this not to exceed a 10% loss of capital on average.
Current-year investment performance
Under the Long Service Benefits Portability Act 2018, the Authority is permitted to invest Scheme assets for the benefit of the Schemes.
The Authority has appointed VFMC as its investment manager and VFMC has determined the following balanced asset allocation of investments for the Authority’s portfolio:
VFMC asset allocation
Australian Equities 24.5%
International Equities 23.9%
Australian Bonds 19.0%
US Bonds (Currency hedged) 7.0%
Australian Credit 7.8%
Emerging Markets Debt (50% Currency Hedged) 4.0%
Cash 13.8%
Figure 1: VFMC Asset Allocation
For the 12 months from 1 July 2020 to 30 June 2021, the Authority realised investment gains of $6.8 million against total scheme funds of $113.8 million as at 30 June 2021. In addition to the $6.8 million investment gain, the Authority also received $5.7 million of investment income during the year. As a result, the net investment gain for the financial year was $12.6 million (or 14.2% return for the financial year) compared to a 12.6% benchmark for the VFMC Balanced Fund which outperformed over the year with stock selection adding value in all asset classes.
Outlook
The Authority is working with its investment manager to adjust portfolio positioning in response to market movements and changes to economic conditions and policy outlook of governments, which may affect key investment asset classes.
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