Reserve Bank of Australia Annual Report – 1995 Financial Statements Related Party and Other Disclosures

Note 14 Related Party and Other Disclosures

The Remuneration Tribunal determines the remuneration appropriate to the Bank's non-executive Board members. In 1994/95, payments totalled $129,136 ($144,187 in 1993/94). In addition, $37,181 was paid for the services of members of the Board of Note Printing Australia who are not employees of the Bank ($35,796 in 1993/94).

Payments made by the Bank to a prescribed superannuation fund in connection with the retirement of members of the Board totalled $135,492 in 1994/95 ($160,184 in 1993/94) and are included in staff costs in Note 2. They represent payments made in respect of executive members of the Board on the same bases as for other employees, and for non-executive members in terms of the Superannuation Guarantee Charge.

The Bank is not empowered to lend to non-executive members of the Board. Loans to the Governor and Deputy Governors are permitted only in terms of section 71 of the Reserve Bank Act; as at 30 June 1995, there are two such loans (aggregating to $408,714 ($417,524 at 30 June 1994)) which have been made for homes in which the officers reside, and are on the same terms and conditions as for other officers of the Bank.

There were no other related party transactions with Board members; transactions with director-related entities which occurred in the normal course of the Bank's operations were conducted on terms no more favourable than similar transactions with other employees or customers.

Superannuation funds Two superannuation funds are operated pursuant to the Reserve Bank Act. The assets of the Reserve Bank Officers' Superannuation Fund (OSF) and the Reserve Bank of Australia UK Pension Fund are held by the Bank as nominee for the respective trustees of the Funds. Such assets are not included in these statements. Payment of the Funds' current and future benefits is funded by member and Bank contributions and the Funds' existing asset bases. The Bank's contributions to the OSF in accordance with the Reserve Bank (Officers' Superannuation) Rules, and to the UK Pension Fund in accordance with the UK Trust Deed, are included in staff costs in Note 2. Administration and other operational costs (eg salaries, overheads, legal costs and valuation fees) incurred by the Bank for superannuation arrangements are also included in Note 2. There were no other related party transactions between the Bank and the Funds during 1994/95.

At 30 June 1995, the OSF had a surplus of assets over accrued benefits of $117.1 million ($152.4 million at 30 June 1994). The UK Pension Fund had a deficit equivalent to $7.7 million ($7.2 million at 30 June 1994). The Bank intends to fully fund the UK Pension Fund in 1995/96 ahead of proposed minimum solvency legislation in the United Kingdom. During 1994/95, the Bank contributed $7.7 million to the OSF and the equivalent of $0.1 million to the UK Pension Fund.

Details of the Funds as at 30 June 1995 are as follows:

	$'000
Reserve Bank Officers' Superannuation Fund
Accrued benefits	426,065
Net market value of plan assets	543,174
Surplus/(Deficit)	117,109
Vested benefits	414,133
Reserve Bank of Australia UK Pension Fund
Accrued benefits	15,413
Net market value of plan assets	7,738
Surplus/(Deficit)	(7,675)
Vested benefits	17,273
Total Superannuation Funds
Accrued benefits	441,478
Net market value of plan assets	550,912
Surplus/(Deficit)	109,434
Vested benefits	431,406

Accrued benefits refer to the present value of future benefits payable to current Fund members, taking into account assumed future salary increases. Vested benefits are the benefits payable if all current members were to terminate their Fund membership at balance date.