SOUTH AUSTRALIAN SUPERANNUATION BOARD

 

 

FUNCTIONAL RESPONSIBILITY AND STRUCTURE

 

Establishment

 

The South Australian Superannuation Board (the Board) is a body corporate established pursuant to subsection 6(2) of the Superannuation Act 1988 (the Act).

 

Functions

 

The Board is responsible for the administration of two separate superannuation schemes.  From 1 July 2006, the Board also became responsible for any superannuation schemes which are declared Administered Schemes under the Act.  The functions and responsibilities for each scheme, established by separate Acts of Parliament, are as follows.

 

South Australian Superannuation Scheme

 

The Act provides for the establishment of an employer sponsored voluntary superannuation scheme to provide superannuation benefits for persons employed by the Government of South Australia and other prescribed persons, and makes provisions for families of such persons.  The Act does not apply to Members of Parliament, the judiciary or police officers who are provided for under separate legislation.

 

Pursuant to subsection 7(1) of the Act, the Board is responsible to the Minister for the administration of the Act except for the management and investment of the South Australian Superannuation Fund (the Fund).  This responsibility includes the maintenance of:

 

·                     accounts in the name of all members of the South Australian Superannuation Scheme (the Scheme);

·                     proper accounts for each financial year on receipts of contributions and payment of benefits.

 

The Scheme has the following components:

 

·                     Old Scheme Division — For the provision of pension based benefits.

·                     New Scheme Division — For the provision of lump sum benefits.

 

In addition, Employer Contribution Accounts have been established to record the employer contributions towards their share of the emerging liability for benefit payments of the Scheme.

 

The Superannuation Funds Management Corporation of South Australia (Funds SA) has statutory responsibility for the investment and management of the Fund.  This Fund comprises the contributions of employees and income derived from investment of those funds, less the Fund portion of benefits payable and administration expenses.  Funds SA also invests and manages the employer contributions on behalf of the Board.

 

The Old Scheme and the New Scheme Divisions were closed to new membership in May 1986 and June 1994, respectively.  The Scheme was replaced by the Southern State Superannuation Scheme (the Triple S Scheme) effective 1 July 1995.

 

Southern State Superannuation Scheme

 

The Southern State Superannuation Act 1994 (Triple S Act) established the Triple S Scheme to provide an employer sponsored contributory superannuation scheme for persons employed in the public sector.  The Triple S Scheme replaced the South Australian Superannuation Scheme as the Government sponsored scheme available to public sector employees.  The Triple S Scheme also includes members of the benefit scheme established by the Superannuation (Benefits Scheme) Act 1992 and police officers who commenced employment from 1 July 1995.

 

The Triple S Scheme provides employer benefits for public sector employees who are not actively contributing to an employer sponsored superannuation scheme, in order to satisfy the minimum level required under the Commonwealth Government’s Superannuation Guarantee (Administration) Act 1992.  The Triple S Scheme also allows employees to make contributions.

 

The Board is responsible under the Triple S Act for the maintenance of:

 

·                     accounts in the name of all members of the Triple S Scheme;

·                     proper accounts for each financial year on the receipt of member contributions and payments to members.

 

The Triple S Act establishes the Southern State Superannuation Fund (Triple S Fund) and the Southern State Superannuation (Employers) Fund (Triple S Employers Fund).  The Triple S Fund comprises contributions of employees whereas the Triple S Employers Fund comprises employer contributions. Both Funds include income derived from investments of those funds, less the Funds’ portion of benefits paid. Funds SA is responsible for the investment and management of both Funds.

 

Post Retirement Investment

 

Pursuant to subsection 47(B) of the Triple S Act, from 1 April 2005 the Board introduced two post-retirement investment products.  These were:

 

·                     Super SA Allocated Pension: an investment product for retired members who want to maintain their money in a superannuation fund which provides a regular income stream rather than withdrawing money in a lump sum.

·                     Super SA Flexible Rollover: an investment product for retired members to maintain their money in a superannuation fund while giving access at any time (subject to preservation rules).

 

The funds held in these products comprise the member’s superannuation funds; other monies as determined by the Board; and income derived from investment of those funds less any benefits paid and administration expenses. These funds are managed and invested by Funds SA.

 

Service Provision Arrangements

 

The Board utilises the services of the Department of Treasury and Finance - Superannuation Office (Super SA) in carrying out its functions.  Super SA maintains individual member records, processes contributions and determines and processes benefit payments.  The Board has a service level contract with the Department of Treasury and Finance for the provision of superannuation administration services.  The contract includes performance standards for services, management reporting and internal control.

 

For further information on the investment and management of superannuation monies reference should be made to comments under ‘Superannuation Funds Management Corporation of South Australia’ elsewhere in Part B of this Report.

 

Changes to Functions

 

On 23 June 2006 Parliament amended the Superannuation Act 1988 which: established the framework for qualifying superannuation schemes to have its administrative functions transferred to Super SA; enables the Trustees to elect to have the superannuation fund’s assets invested and managed by Funds SA and the responsibility of the scheme to be taken over by the Board.

 

On 30 June 2006, the Treasurer declared the South Australian Ambulance Service Superannuation Scheme a scheme and fund established under the Act and the Board became responsible for the fund and scheme from 1 July 2006.

 

Structure

 

Audit Committee

 

The Board established an Audit Committee which comprises three members and operates within the framework of a Terms of Reference.  The Audit Committee’s primary function is to assist the Board in exercising due care, diligence and skill in discharging its oversight and monitoring responsibility.  Audit representatives attended Audit Committee meetings throughout the year.

 

 

AUDIT MANDATE AND COVERAGE

 

Audit Authority

 

Audit of the Financial Report

 

Subsection 31(1)(b) of the Public Finance and Audit Act 1987 provides for the Auditor-General to audit the accounts of the Board for each financial year. The activities of the Board are reflected in the two schemes it administers. Details of the audit mandate for the audit of the financial report of these two schemes is provided under the ‘South Australian Superannuation Scheme’ and ‘Southern State Superannuation Scheme’ which directly follows this section of Part B of this Report.

 

Assessment of Controls

 

Subsection 36(1)(a)(iii) of the Public Finance and Audit Act 1987 provides for the Auditor-General to assess the controls exercised by the Board in relation to the receipt, expenditure and investment of money, the acquisition and disposal of property and the incurring of liabilities.

 

This assessment also considers whether those controls are consistent with the prescribed elements of the Financial Management Framework as required by Treasurer’s Instruction 2 Financial Management Policies.

 

Scope of Audit

 

The audit program covered major financial systems and was directed primarily to obtaining sufficient evidence to form audit opinions on the financial reports of the superannuation schemes and the Board’s internal controls.

 

 

AUDIT FINDINGS AND COMMENTS

 

Audit Opinion

 

Information on the audit coverage, findings and audit opinion on the financial reports of the individual superannuation schemes is provided under the ‘South Australian Superannuation Scheme’ and ‘Southern State Superannuation Scheme’ which directly follows this section of Part B of this Report.  

 

The following provides commentary on overall issues that are not covered in the comments on the individual schemes.

 

Assessment of Controls

 

In my opinion, the controls exercised by the Board in relation to the receipt, expenditure and investment of money, the acquisition and disposal of property and the incurring of liabilities are sufficient to provide reasonable assurance that the financial transactions of the Board have been conducted properly and in accordance with law.

 

Audit Communications to Management

 

General Controls

 

The audit indicated that the internal controls over the Board’s administration of the schemes were generally satisfactory. Matters arising during the course of the audit were detailed in a management letter to the Chairman. A satisfactory response to the management letter has been received.

 

Superb and ePass Computer Processing Environment Review

 

The 2004-05 Report included matters arising from the audit of the Board’s Superb and ePass computing environment and operations.

 

The Superb system is the principal superannuation fund and management regulatory system and its functions include the processing of member contributions.  The ePass system allows agencies to electronically transfer membership contribution data and members to directly access certain information via the internet.

 

The main matters requiring attention in last year’s Report were:

 

·                     Improvement in user and system documentation

·                     Implementation of transaction logging and review process

·                     Aspects of Business Continuity Planning.

 

In 2004-05 the Board responded to the audit findings in a satisfactory manner.  A follow-up audit in 2006 confirmed satisfactory action was taken to address the matters requiring attention.

 

In May 2006 the Board’s Information Technology function and resources were transferred to the Corporate Services Branch of the Department of Treasury and Finance.  The Department is in the process of finalising arrangements for an off-site Disaster Recovery Site.  The Site will accommodate recovery arrangements for the Board’s systems.  Audit will review these arrangements in 2006-07.