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Operating environment

The Authority continues to consolidate processes and procedures to ensure efficient and effective service delivery to employers and workers that are registered under the Scheme.

Under the Long Service Benefits Portability Act 2018, the Authority administers and operates the Portable Long Service Benefits Scheme for employers and eligible workers in Victoria’s community services, contract cleaning and security industries.

Businesses employing workers in these industries must register with the Authority through its online portal.

The Authority liaises with employers to support them to understand their obligations under the legislation, and how the levy that employers must pay for their eligible workers will be applied.

Each quarter registered employers are required to lodge a quarterly return to the Authority that details relevant worker information and pay a levy which will is invested by the Authority with the objective of meeting future long service payments to eligible workers.

The Scheme allows eligible workers to accrue long service leave and take it with them if they change employers but remain in the same industry. Registered workers can access the Authority’s online system at any time to check their balances or update their details. When workers become entitled, usually after at least 7 years of service, they can apply for payment of their portable long service benefit.

The Authority has a Governing Board that reports to the Minister for Industrial Relations.

In accordance with the Act, the Governing Board:

  • sets the levy to be paid by employers and contract workers
  • is responsible for the governance, strategic planning and risk management of the Authority
  • advises the Minister on agreements for corresponding schemes across Australia and may perform functions and exercise the powers of the Authority that it deems appropriate

The Chief Executive Officer and Registrar, who is a member of the Governing Board, is also responsible for the day-to-day management of the Authority and its operations.

An Audit and Risk Committee also provides support and assurance as well as advice to the Governing Board.

External environment

The Scheme addresses a long-identified gap in the industrial relations landscape relating to long service benefits in the selected covered industries.  Previously, many workers who remain employed in these covered industries have been unable to meet the requirements to accrue long service leave due to the contractual nature of employment in those sectors.

The Authority has an important role in administering the Scheme.  It will do this both by supporting its stakeholders to understand how the Portable Long Service Benefits Scheme operates and how it is administered.  In support of this, the Authority also has compliance powers and will adjust its regulatory posture to strike a balance between the use of these compliance powers in the face of clear wrongdoing versus educating employers who steadfastly determine not to register eligible workers and thereby depriving these workers of the long service benefits that they are entitled to under the Scheme.

The external environment and general economic conditions will also affect the investment performance of the Scheme that is used to fund worker liabilities.  Investment performance along with other changes in demographic assumptions such as unemployment rates will also give an effect on the levy rate that is required to be charged to employers to fund the underlying Scheme.  The appointed actuary both scrutinises and supports the Authority to ensure that funding and liquidity measures are appropriate and adequate.

The triannual actuarial review of the Portable Long Service Authority is not required to be conducted by the independent actuary until 2021 22. However, due to the inherent complexities in the make-up of workers in the covered sectors under the amended Regulations, as well as the effects that COVID-19 continues to have on the economic and other assumptions underpinning the review conducted for the setup of the Scheme, the Governing Board has resolved to bring forward the timing of the triannual review to be conducted by 30 June 2021.  Based on the results of this review, the Governing Board will also consider whether any adjustments to the current levy rate is required.

Key challenges and risks

  • Operations - The Authority continues to consolidate processes and procedures to ensure efficient and effective service delivery to employers and workers that are registered under the Scheme. Over the coming years, the Authority will continue investing in technology, especially in relation to new functionality that will be aimed at making it easier for employers and workers whether it is to submit their Quarterly Returns or simply to view their benefits balances.
  • Investment - The Authority is required to invest employer contributions prudently to ensure that there are sufficient assets to meet the long service leave needs of workers. Funds invested must be able to withstand volatile financial market conditions. The Authority sets and reviews regularly its Investment Strategy Policy to take into account changes in market conditions. The appointed actuary provides scrutiny over the adequacy of the funds held by the Authority.
  • Contribution levy payments - For the Scheme to remain sustainable long-term, and in compliance with the legislation, eligible employers must be registered and pay the required contribution levy. The Authority has implemented a fair and equitable compliance framework to address and prosecute identified compliance breaches such as non-payment of contribution levies.
  • Information technology - The Authority’s online portal and underlying registration system is a cloud-based vendor supported product that allows employers and workers to log-on from anywhere in the world.  This enables employers to fulfil their legislative obligations, and workers to view their benefits, from anywhere in the world as long as they have internet access. 
    The Authority oversees and rigorously monitors its partnerships with outsourced service providers that support the critical elements of the IT system and infrastructure.  This ensures that data processes are functioning as designed. Regular testing, monitoring and backups of information are performed in accordance with the Authority’s internal controls framework. As part of the Victorian Public Sector, staff of the Authority are also trained on the relevant records management policies that are required in order to comply with Public Records Office Victoria (PROV) guidelines.