Reserve Bank of Australia Annual Report – 1998 Financial Statements Note 13 – Related party and other disclosures

The Remuneration Tribunal determines the remuneration appropriate to the Bank's non-executive Board members. In 1997/98, payments totalled $174,782 ($181,804 in 1996/97). In addition, $40,853 was paid for the services of members of the Board of Note Printing Australia, who are not employees of the Bank ($39,523 in 1996/97).

Payments made by the Bank to a prescribed superannuation fund in connection with the retirement of members of the Board totalled $61,702 in 1997/98 ($367,011 in 1996/97) 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; at 30 June 1998, there are three such loans (aggregating to $378,260 (three loans aggregating to $433,340 at 30 June 1997)) 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 1997/98.

At 30 June 1998, the OSF had a surplus of assets over accrued benefits of $158 million ($160 million at 30 June 1997). The UK Pension Scheme had a surplus equivalent to $6.7 million ($3.0 million at 30 June 1997). During 1997/98, the Bank made superannuation contributions of $3.3 million ($5.4 million in 1996/97).

Details of the Funds as at 30 June 1998 are as follows:

1997 $'000 1998 $'000
Reserve Bank Officers' Superannuation Fund
Accrued benefits 446,361 410,606
Net market value of assets 606,729 568,889
Surplus 160,368 158,283
Vested benefits 448,079 414,171
Reserve Bank of Australia UK Pension Scheme
Accrued benefits 15,560 18,392
Net market value of assets 18,588 25,153
Surplus 3,028 6,761
Vested benefits 16,615 20,921
Total Superannuation Funds
Accrued benefits 461,921 428,998
Net market value of assets 625,317 594,042
Surplus 163,396 165,044
Vested benefits 464,694 435,092

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.