Untitled - Annual Report 2004 - The University of Western Australia

THE UNIVERSITY OF WESTERN AUSTRALIANotes to the Financial Statementsfor the year ended 31 December 20041. Statement of Accounting Policies (continued)(ii)Long Service LeaveA liability for long service leave is recognised and is measured as the current value of expected future payments to bemade in respect of services provided by employees up to the reporting date. Consideration is given to expected futurewage and salary levels (including oncosts), based on statistical data related to employee departures and periods of service.(iii)Parental LeaveA liability for parental leave is recognised based on the University’s present obligation to make future parental leavepayments in respect of services provided by employees up to the reporting date. The current value of these futurepayments incorporates expected future wage and salary levels (including oncosts), based on statistical data related tohistorical employee parental leave and periods of service.(iv)SuperannuationThe University contributes to a number of employee funds that exist to provide benefits for employees and theirdependants on retirement, disability or death.(A) Defined Benefit Plan (DBP)/Investment Choice Plan (ICP):The employer contribution rate for 2004 was 14 per cent of salaries and represents an employer/employee contributionratio of 2:1. This plan was established 1 October 2000 and is administered by UniSuper Ltd.(B) Award Plus Plan (APP):The ‘Superannuation Guarantee Charge’ provides two levels of contribution rates, i.e. 3 per cent for members of othersuperannuation schemes and 9 per cent for staff not covered by other schemes. This plan was established 1 October2000 and is administered by UniSuper Ltd.(C) Supplementary Pension SchemeSupplementary pension benefits are provided for members of the 1963 and 1979 Superannuation Schemes which wereclosed to new entrants following the introduction of the Superannuation Scheme for Australian Universities in 1983(presently DBP, ICP and APP administered by UniSuper Ltd). Benefits are payable on the retirement of the member inthe form of a pension determined in accordance with the scheme’s rules. An independent review of this scheme in2004 indicated a deferred liability of $8,418,240. The current estimated net assets attributable to the scheme are$7,211,922, an estimated shortfall of $1,206,318. Approval has been received to fund the estimated shortfall fromUniversity reserves in the short term if required.(D) Supplementary Benefits SchemeThis scheme which closed in 1983 to new members provides for eligible staff to receive an additional lump sum onretirement. An actuarial assessment made in 2004 estimated the future liabilities at $4,869,261. This scheme is currentlyconsidered fully funded.(v)Other Employee BenefitsAll other benefits are recognised when the benefit is received by the employee and measured at the rates paid orpayable.(p)Restricted Grants and Bequest FundsRestricted grants and bequests received by the University are used to fund research activities, scholarships, prizes, lecturesand other activities specified by the contributing party. While these funds are included in the ‘University’ column as theUniversity has direct control over such funds, the grants and bequest funds are considered restricted assets as disclosed inthe notes to the financial statements.(q)Insurance and Provision for Workers’ Compensation InsuranceThe University has taken out appropriate cover through an appointed insurance broker for all relevant risks except for minorclaims which are expensed by the University at the time of the loss. There have been no other events during 2004 that havegiven rise to any other present obligation.Continued overleaf51