Message from the Chair and CEO

We are pleased to present the Corporate Plan 2020-23 for the Portable Long Service Benefits Authority (the Authority). This plan covers the periods 2020-21 to 2022-23 and sets out the Authority’s short and medium-term priorities along with its key measures for success.

The Authority’s vision is to deliver a quality Portable Long Service Benefits Scheme (the Scheme) to protect the benefits of those who are entitled to them. The Scheme allows eligible workers in the community services, contract cleaning and security industries to build up long service benefits based on time in their industry, rather than with a single employer.

We cannot achieve our vision alone. Our success relies on the collaboration of many different stakeholders including the employers and workers who are critical to the success of the Scheme.

By the end of the first full year of operations in 2019-20, the Authority will have built a remarkable foundation with over 100,000 registered workers – 30% greater than independent actuarial modelling had indicated.

It will be important for the Authority to maintain this momentum through a continued strategy of focussing on educating employers about the Scheme, as well as acknowledging that where necessary, enforcement options will need to be used to ensure that all workers who are required to be registered are registered.

To support the Authority’s vision, management will continue to invest in our internal capabilities and use technology to generate efficiencies where possible. We continue to invest in new ways to make our online portal the best it can be for our stakeholders.

Finally, we would like to acknowledge our staff, mostly based in Bendigo in regional Victoria, for their dedication during what has been a challenging year, with the effects arising from COVID-19 and its impact not just on work but everyone’s daily lives. Without our staff, we could not deliver on the Vision and Purpose that are set out in this document.

Julius Roe
Chair, Governing Board

Joseph Yeung
CEO and Registrar

Who we are

The Portable Long Service Benefits Authority is an independent statutory body established to administer the Long Service Benefits Portability Act 2018. The Act, together with the Interim Long Service Benefits Portability Regulations 2019, provides a scheme for the portability of long service benefits to eligible workers in the Community Services, Contract Cleaning and Security industries.

The Scheme was created in response to the Victorian Parliament’s Economic, Education, Jobs and Skills Committee inquiry into the portability of long service leave entitlements. It enables eligible workers to accrue long service benefits based on length of time employed in their respective industry, as opposed to the length of time employed by one employer.

Vision

Delivering a quality Portable Long Service Benefits Scheme to protect the benefits of those who are entitled to them.

Purpose

The Authority administers an effective Portable Long Service Benefits Scheme through prudent, sustainable investment and supporting all stakeholders – including employers and workers alike – as well as educating and enforcing every stakeholder’s role and interest in the Scheme.

Functions

The Authority has several key functions pursuant to the Long Service Benefits Portability Act 2018:

1. administering the Portable Long Service Benefits Scheme in the covered industries
2. making payments of benefits
3. keeping registers of employers and workers
4. resolving disputes as to the timing of taking long service leave
5. consulting other industries that may be affected by decisions made under the Act in relation to covered industries

Independence

The Portable Long Service Benefits Authority was established as an independent statutory body with an official seal. Under the Act, the Authority may sue and be sued and acquire, hold and dispose of property.

Values

The Authority has adopted the Victorian Public Sector values, which underpin the behaviours that the government and community rightly expect of it. Acting consistently with these values strengthens the Authority’s capacity to operate effectively and achieve our objectives. These values are:

• Responsiveness – we are approachable and provide timely, useful and accurate information.
• Integrity – we have unbiased and honest interactions.
• Impartiality – we are firm and consistent in our application of the law.
• Accountability – we fulfil our objectives in a clear, transparent and responsible manner.
• Respect – we respect our stakeholders, each other and ourselves.
• Leadership – we seek to have a positive influence and to empower others.
• Human rights – we administer the law and deliver decisions, advice and policy that respect and support everyone’s human rights.

Governing Board and Chief Executive Officer / Registrar

The Portable Long Service Benefits Authority has a Governing Board comprising a mix of expert skills, qualifications and experience. It includes individuals from organisations representing employers and workers in the three covered industries.

Our Governing Board members are:

• Mr Julius Roe, Chair
• Ms Claire Filson, Deputy Chair
• Ms Emma King
• Ms Kate Marshall
• Mr Tim Piper
• Ms Rachaell Saunders
• Ms Julie Warren
• Ms Linda White
• Mr Joseph Yeung, CEO / Registrar

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

Divisions

Finance and Operations

The Finance and Operations division underpins our operations and the Chief Financial Officer who leads the division has specific responsibilities under the Financial Management Act 1994. Monitoring performance and budgeting for sustainability are imperative for the ongoing viability of the Authority and the Scheme, and a robust investment strategy ensures worker’s entitlements are managed prudently.

The division also delivers our core registry and enforcement functions through engaging with employers and supporting them to fulfil their obligations.

Corporate Governance, Communication and Education

The Corporate Governance, Communication and Education division ensures good governance, is the custodian of the integrity framework and delivers sound legal advice to the Authority, as well as facilitating the efficient and effective running of the Governing Board and the Audit and Risk Committee.

It also leads communications, identification of and engagement with key stakeholders and internal and external education activities to ensure that employers understand and can meet their obligations and workers know their rights.

The division is responsible for facilitating a sound internal and external understanding of compliance with the Act we administer and supporting the enforcement of those obligations through an effective external compliance framework.

Facilities and Information Technology

The Facilities and Information Technology division underpins our core operations and manages key vendors which support our network infrastructure and telephony systems. Having the best systems in place enables us to be efficient and effective in delivering our functions.

People and Culture

The People and Culture business unit support the growth and development of our people and culture. Our people are our greatest asset. Without our people, we have no capability to fulfil our statutory obligations under the Act.

The Authority’s stakeholders include the Minister for Industrial Relations, Industrial Relations Victoria in the Department of Premier and Cabinet, other government departments and agencies, unions representing workers in the covered sectors, industry organisations representing employers in the covered sectors as well as similar portable long service benefit authorities in other Australian jurisdictions.

Employers and workers in the Community Services, Contract Cleaning and Security industries are key stakeholders as it is vital that they understand their rights and obligations under the Portable Long Service Benefits Scheme.

Over the next three years, we will continue to:

• identify and recognise different stakeholders with a view to building and establishing strong relationships
• improve and educate stakeholders about the Scheme, the underlying legislation as well as listen to their needs and concerns
• provide relevant information so that stakeholders can understand their rights and obligations so that they can make informed decisions

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.

As a statutory body, the Portable Long Service Benefits Authority is required to comply with various requirements under legislation. Key legislation that governs the risk management of the Authority includes the various legislative obligations set out in the Long Service Benefits Portability Act 2018 and the Financial Management Act 1994. Effective risk management practices not only assist the Authority with meeting those obligations but also ensures that the Authority’s strategic objectives can be achieved in a controlled setting.

The Authority’s approach to risk management is to weave risk into the natural rhythm of the organisation and move risk beyond just a compliance exercise. Risk management is embedded in all decision-making processes across the organisation.

Principles for decision-making

• Strategic - We protect and sustainably grow funds while equitably administering the Scheme and building trust with stakeholders.
• Financial - We exercise prudent organisational financial management that supports the organisation sustainably.
• Service delivery - We strive to have positive interactions that help build awareness, education and engagement. We provide people with accurate information that supports informed decision-making.
• Operations - We take the initiative to enforce compliance after education initiatives are exhausted. We reserve the right to recover outstanding employer levies from the date for which the employer is liable.
• Information technology - We ensure we have secure technology solutions that encourage interaction and efficient registrations and ongoing service.
• Compliance and legal - We establish sound internal controls to prevent and avoid material and systemic compliance failures. Intentional misbehaviour will not be tolerated. Accept calculated legal risks and apply practical judgement to foster compliance with employers’ and workers’ legislative obligations.
• People - We maintain a safe, healthy workplace, actively recognising the value of employee contributions, develop team capability and encourage resilience and problem-solving in our staff.

Local jobs

The Victorian Government chose Bendigo as the location of the Authority as part of its commitment to invest in regional Victoria. The Authority has supported this initiative and grown jobs in the region by recruiting from a talented pool of staff and using suppliers that are located in the local area wherever possible.

To date, the Authority has recruited 28 FTE staff from Bendigo and the surrounding area and developed a healthy and safe workplace with a culture that encourages engaged, resilient and solutions-focused staff.

Registration of workers and employers

Since 1 July 2019, the Authority has registered more than 100,000 Victorian workers who now have access to portable long service benefits. More than 1,800 employers have also been registered and are meeting their obligations under the legislation.

Going forward, the implementation of an External Compliance and Enforcement Policy will guide the Authority’s use of its compliance powers.

Collection and investment of levy payments

In its first year of operations, the Authority has invoiced over $25 million in employer levies, with a prudent investment strategy that will help grow and ensure the long-term sustainability of the funds in the Scheme. The Authority has engaged Victorian Funds Management Corporation to manage its investment portfolio.

Governance

The Authority has also put in place effective systems and processes to support its core operations with key policies and procedures to enable good governance, integrity and strong controls. Risk Management Policy and Procedures are in place as well as an overarching Risk Strategy guides organisational decision making. The Governing Board has defined its risk appetite, and this has been communicated to the Authority’s staff.

Communications and engagement

Registration numbers and compliance with the Scheme indicates the Authority is communicating effectively with its stakeholders to ensure that information is available for stakeholders. This has included meetings with peak bodies and industry associations along with the introduction of new channels for information such as social media and online training to support covered employers.

Systems and processes

The ongoing review and management of the systems and processes enable the Authority to work effectively and efficiently, including the establishment of offices in both Bendigo and Melbourne. This has been evident in the way the Authority has been able to respond and adapt quickly to the changing environment and challenges posed by the COVID-19 pandemic that saw many of our staff working from home for extended periods.

In keeping with our vision of delivering a quality Portable Long Service Benefits Scheme to protect the benefits of those who are entitled to them, our key performance measure over the next three years is to have 165,000 workers registered under the Portable Long Service Benefits Scheme.

As a Regulator, the Authority is required to meet the targets set by the Minister for Industrial Relations through a formal Statement of Expectations. This statement will be reported annually, and will include expectations relating to:

• timeliness, efficiency and effectiveness
• employing risk-based approaches to regulatory operations
• providing easy to understand, effective and accessible compliance information to the public
• ensuring accountability and transparency of operations, and
• undertaking clear and consistent regulatory activities

At an operational level, the Authority has also developed a number of key performance measures to monitor the progress of key activities within the Authority. These key performance measures are detailed in Appendix 1 of the Corporate Plan.

People

For the 2019-20 financial year, the Authority’s average FTE was 31.0. This is expected to increase to an average FTE of 50 as size and complexity of the Scheme increases.

Financial

Financial strategy

The establishment of the Authority was funded by government through a project that was initially led by Industrial Relations Victoria. Ongoing financial sustainability will be achieved through an administration charge to the Scheme recommended by the appointed actuary and determined by the Governing Board.

No additional amounts are separately charged to employers or workers other than the levy that is paid on a quarterly basis following the submission of quarterly returns by employers in each of the three covered sectors. The current levy rate is set at 1.65% for the community services sector and 1.80% for both the contract cleaning and security sectors.

Summary financial performance for 2020-21

In the Authority’s Corporate Plan 2019-20, expenses for the 2019-20 financial year were forecast to be $6.0 million against a revenue of $5.3 million (based on previous budget expectations of registered worker numbers). The current forecast for the 2019-20 financial year (which represents a 5% – 10% saving on last year’s estimates) was achieved through a combination of active budget management and some savings arising from reduced compliance activity by the Authority relating to the effects of COVID-19 in the 2019-20 financial year.

The savings due to reduced compliance activity from COVID-19 will be incurred in the 2020-21 financial year. This accounts for the ‘higher-than-expected’ increase in expenses for the 2020-21 financial year.

Summary of key financial performance measures 2020-23

The Authority has revised upwards all its forward estimates for registered worker numbers compared to the published Corporate Plan 2019-20 due to a higher registration rate than expected in the 2019-20 financial year.

The Authority’s financial results (including the Scheme financial results) are audited annually by the Victorian Auditor General’s Office (VAGO). The results of the audit are included in the Annual Report published by the Authority and tabled in the Victorian Parliament.