The Judges’ Pensions Scheme (the Scheme) is a compulsory superannuation scheme established pursuant to the Judges’ Pensions Act 1971 (the Act). The Treasurer is responsible for the payment of contributions from the Government for Scheme members and for the payment of superannuation benefits to members and members’ families. The Scheme is non-contributory for members.
The main financial administration arrangements that apply in relation to the Scheme involve a Special Deposit Account (the Account). The Account records as income, contributions and revenue derived from the investment of those monies, and also records as payments from the Account, benefit payments and administration costs.
The investment management responsibility for the Account is vested with the Superannuation Funds Management Corporation of South Australia (Funds SA).
The services of the Department of Treasury and Finance - Superannuation Office are utilised to administer the Scheme.
Investment activity for the year resulted in a negative return of $4.7 million compared to a positive return of $2.7 million in the previous year.
Benefits expense decreased by $2.5 million to $9.2 million.
Subsection 31 of the Public Finance and Audit Act 1987, provides the authority for the Auditor-General to audit the accounts of the Scheme.
The audit program covered all major financial systems and was directed primarily towards obtaining sufficient evidence to enable an audit opinion to be formed with respect to the financial statements and internal control.
During 2001-02 specific areas of audit attention included:
contributions from employers
pension payments.
A management letter conveying the scope and results of the audit will be forwarded to the Under Treasurer.
The general financial control structure was found to be satisfactory.
As required by subsection 36(1)(a)(iii) of the Public Finance and Audit Act 1987, the audit of the Judges’ Pensions Scheme included an assessment of the controls exercised in relation to the receipt, expenditure and investment of money, the acquisition and disposal of property and the incurring of liabilities. The assessment also considered whether those controls were consistent with the prescribed elements of the Financial Management Framework as required by Treasurer’s Instruction 2 ‘Financial Management Policies’.
Audit formed the opinion that the controls exercised over the Judges’ Pensions Scheme in relation to the receipt, expenditure and investment of money; the acquisition and disposal of property; and the incurring of liabilities, were sufficient to provide reasonable assurance that the financial transactions of the Scheme were conducted properly and in accordance with law.
The operating result for the year records a deficiency of $11.2 million compared to a deficiency of $6.3 million last year. The year’s result represents the excess of benefits expense of $9.2 million and negative net investment revenue of $4.6 million over employer contributions of $2.7 million. Note 1(c) to the financial statements explains that the small size of the scheme, the nature of the way member benefits accrue and variations in investment performance means that deficiencies and surpluses will arise from year to year.
As at 30 June 2002, there was an excess of liabilities over net assets of $11.4 million ($185 000). This is due mainly to a decrease in the value of investments of $5.5 million to $82.4 million an increase in liability for accrued benefits of $5.8 million to $93.3 million.