Australian Government - Department of Foreign Affairs and Trade

Advancing the interests of Australia and Australians internationally

Australian Government - Department of Foreign Affairs and Trade

Advancing the interests of Australia and Australians internationally



Note 17: Liabilities Administered on Behalf of Government

  2011
$’000
2010
$’000
PAYABLES    
     
Note 17A: Suppliers    
Trade creditors and accruals 329 12,540
Other 3 19
Total suppliers 332 12,559
     
Supplier payables expected to be settled within 12 months:    
External parties 332 12,559
Total 332 12,559
     
Settlement was usually made within 30 days.    
     
Note 17B: Other Payables    
NIA * 21,061 42,908
Unearned income - passports revenue 10,844 9,160
Unearned income - Sponsorship - 1,621
GST Payable to the ATO - 278
Defined Benefit Pension Schemes - NAPS 28,753 34,735
Defined Benefit Pension Schemes - Other 3,989 5,598
Total other payables 64,647 94,300
     
Total other payables are expected to be settled in:    
No more than 12 months 16,422 19,146
More than 12 months 48,225 75,154
Total other payables 64,647 94,300

* Loans on the National Interest Account (NIA) are funded from the Commercial Account at fair value.  The amount disclosed above reflects the Commonwealth's exposure on business undertaken in the NIA. It reflects the net amount of assets in the form of loans and rescheduled credit insurance debts to overseas governments, commitment fees on loans received by EFIC but not yet paid to the Commonwealth, unamortised portions of the reinsurance payments and bond premiums receivable from exporters and liabilities relating to the reimbursement to EFIC for debt forgiveness on loans, provision for unearned income on loan premiums, accrued expenses including EFIC administration fees and other creditors.

 

Defined Benefit Pension Schemes    
  2011
$’000
2010
$’000
     
The amounts recognised in the Balance Sheet are as follows:    
Present value of funded obligations 26,903 30,246
Fair value of plan assets (22,914) (24,648)
  3,989 5,598
Present value of unfunded obligations 28,753 34,735
Net liability in balance sheet 32,742 40,333
     
Movements in the net liability recognised in the Balance Sheet as follows:    
Net liability at the start of the year 40,333 39,466
Exchange differences on foreign plans (7,134) (2,604)
Net expense recognised in the income statement 2,445 2,904
Net actuarial losses (gains) (28) 3,414
Contributions (712) (580)
Transfer of benefit (2,162) (2,267)
Net liability at the end of the year 32,742 40,333
     
The amounts recognised in the Income Statement are as follows:    
Current service cost 1,150 928
Interest on obligation 2,833 3,378
Expected return on plan assets (1,538) (1,369)
Past service cost - -
Losses (gains) on curtailments and settlements - (33)
Total included in 'employee benefit expense account' 2,445 2,904
     
Amounts recognised directly in administered equity    
Financial year ended 2011
$’000
2010
$’000
Actuarial Gains (Losses) 28 (3,414)
     
Cummulative amounts of gains and losses recognised in administered equity    
Financial year ended 2011
$’000
2010
$’000
Actuarial Gains (Losses) (10,562) (10,590)
     
Scheme Assets    
The fair value of scheme assets is represented by:    
Financial year ended 2011 2010
UK equities 31.9% 29.5%
Overseas equities 39.6% 40.6%
Long dated UK corporate bonds 15.8% 17.1%
Long dates UK Gilts 8.3% 8.5%
Cash 0.1% 0.1%
Insured Pensioner 1.9% 2.1%
Investment in LIC India 2.4% 2.1%

Fair Value of scheme assets

The fair value of scheme assets does not include amounts relating to:

•  any of the Department's (and the Australian Government's) own financial instruments; and

•  any property occupied by, or other assets used by the Department (or the Australian Government)

Expected return on schemes assets

The expected return on assets assumptions is determined by weighting the expected long-term return of each asset class by the targeted allocation of assets to each asset class and allowing for the correlation of the investment returns between asset classes. The returns used for each class are net of investment tax and investment fees. 

Actual return on scheme assets    
Financial year ended 2011
$’000
2010
$’000
Actual return on scheme assets 2,870 6,534
Actual return on scheme assets as a percentage 13% 27%
     
Principal actuarial assumptions at the reporting date (expressed as weighted averages):    
Financial year ended 2011 2010
Discount rate at 30 June 5.27% 5.41%
Expected return on assets at 30 June 7.54% 7.55%
Salary growth 3.60% 3.46%
Price inflation 3.24% 3.12%
Pension growth 2.80% 3.00%

 

Historical Information

Financial year ended 2011
$'000
2010
$'000
2009
$'000
2008
$'000
2007
$'000
Present value of defined benefit obligations (55,656) (64,981) (60,950) (56,221) (64,469)
Fair value of scheme assets 22,914 24,648 21,484 26,210 31,253
Surplus / (deficit) in the scheme (32,742) (40,333) (39,466) (30,011) (33,216)
Experience adjustments gain / (loss) - Net liabilities 28 (3,414) (4,629) 76 2,217

 

Expected Employer Contributions

Financial year ended 2012
$'000
2011
$'000
Expected employer contributions1 631 712

1 This represents the employer contributions, which are paid into the schemes fund

Scheme Information

The Department administers on behalf of the Australian Government, defined benefit pension schemes for locally engaged staff at posts in London and New Delhi, and also the North American Pension Scheme. All schemes, with the exception of the New Delhi Gratuity Scheme, have been closed to new employees and provide pensions that are linked to final salaries.  Figures disclosed are based on formal actuarial reviews that are generally conducted triennially and reviewed and updated by the actuary on an annual basis.  The New Delhi scheme is fully funded , London scheme is partially funded and the North American Pension Scheme is fully unfunded.  Contributions for the North American Scheme are made to the Department of Finance and Deregulation, which will provide funding for benefits payable under the scheme. 

 

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