Reserve Bank of Australia Annual Report – 1996 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 1995/96, payments totalled $199,805 ($129,136 in 1994/95). In addition, $36,947 was paid for the services of members of the Board of Note Printing Australia who are not employees of the Bank ($37,181 in 1994/95).

Payments made by the Bank to a prescribed superannuation fund in connection with the retirement of members of the Board totalled $142,320 in 1995/96 ($135,492 in 1994/95) 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 1996, there are two such loans (aggregating to $391,134 ($408,714 at 30 June 1995)) 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 Reserve Bank of Australia Officers' Superannuation Fund (OSF) and the Reserve Bank of Australia UK Pension Scheme. A small part of the assets of the OSF are held by the Bank as nominee for the trustees of the OSF; 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 Scheme 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 1995/96.

At 30 June 1996, the OSF had a surplus of assets over accrued benefits of $132 million ($117 million at 30 June 1995). The UK Pension Scheme had a surplus equivalent to $1.9 million (a deficit of $7.7 million at 30 June 1995). During 1995/96, the Bank contributed $7.8 million to the OSF; it also contributed the equivalent of $8.9 million to fully fund the UK Pension Scheme ahead of minimum solvency legislation in the United Kingdom.

Details of the Funds as at 30 June 1996 are as follows:

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.