Reserve Bank of Australia Annual Report 2011

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Accounting Valuation For financial statement purposes, the financial positions of the superannuation schemes are valued in accordance with AASB 119. Under AASB 119, accrued benefits are determined by discounting future benefits payable to current fund members at the yield on government bonds of similar maturity on the reporting date. The approach under AASB 119, in contrast with the results of the actuaries’ triennial valuations noted above, does not take into account that the assets held by the superannuation schemes to fund future benefits have generally earned a higher rate of return on average than government bonds. The principal actuarial assumptions for the AASB 119 valuation used in the case of the OSF were a discount rate of 5.38 per cent (5.27 per cent in 2009/10), future salary increases of 3.5 per cent (3.5 per cent in 2009/10), future pension increases of 3.5 per cent (3.5 per cent in 2009/10) and an assumed return on plan assets of 8.5 per cent (8.5 per cent in 2009/10). The actual return on plan assets of the OSF for 2010/11 was 8.1 per cent (10.6 per cent in 2009/10). The assumptions used for the UK Pension Scheme were a discount rate of 5.4 per cent (5.3 per cent in 2009/10), future salary increases of 5.65 per cent (5.25 per cent in 2009/10), future pension increases of 3.65 per cent (3.25 per cent in 2009/10) and an assumed return on plan assets of 4.1 per cent (4.4 per cent in 2009/10). The actual return on plan assets of the UK Pension Scheme for 2010/11 was 10.0 per cent (6.1 per cent in 2009/10). The expected overall rates of return are based on the actuaries’ models of returns for major asset classes and reflect the historic rates of return and volatility for each class and correlations across asset classes. Details of the funds are as shown on the following pages. In the case of the OSF, these details relate only to the defined benefit component of the fund; defined contribution accumulation balances, on which the Bank has no actuarial risk, are excluded. This has no effect on the measurement of the surpluses in the OSF. At 30 June 2011 accumulation balances in the OSF totalled $165.4 million ($150.5 million as at 30 June 2010). Asset Distribution as at 30 June % of fund assets OSF UK Pension Scheme 2011 2010 2011 2010 Cash and short-term securities 6.3 4.5 1.6 – Fixed interest securities 7.2 7.0 – – Indexed securities 1.5 2.2 91.9 94.3 Domestic shares 42.7 40.2 6.5 5.7 Foreign shares 3.8 4.1 – – Property Direct 4.3 4.6 – – Indirect 15.9 16.6 – – Private equity and alternative investments 18.3 20.8 – – Total 100 100 100 100 94 Reserve bank of Australia
Note 14 – Superannuation Funds (Continued) Opening balances: 2011 $M OSF UK Scheme Total 2010 $M 2011 $M 2010 $M Net market value of assets 691 652 18 20 710 672 Accrued benefits (928) (829) (14) (14) (942) (843) Surplus/(deficit) (236) (177) 4 7 (232) (170) Effect of asset cap – – (3) (3) (3) (3) Actuarial (gains)/losses not included in balance sheet under Corridor 320 272 (3) (4) 317 268 Exchange rate (gains)/losses – – 1 – 1 – Opening superannuation asset 84 95 – – 83 95 2011 $M 2010 $M Change in net market value of assets 39 39 (2) (2) 37 37 Change in accrued benefits (49) (99) 1 – (48) (99) Change in asset cap – – – – – – Change in actuarial (gains)/losses not included in balance sheet under Corridor (12) 48 – 1 (12) 49 Exchange rate (gains)/losses – – 1 1 1 1 Total change in superannuation asset (22) (12) – – (22) (12) Closing balances: Net market value of assets 730 691 17 18 747 710 Accrued benefits (976) (928) (13) (14) (989) (942) Surplus/(deficit) (246) (236) 4 4 (242) (232) Effect of asset cap – – (3) (3) (3) (3) Actuarial (gains)/losses not included in balance sheet under Corridor 307 320 (3) (3) 304 317 Exchange rate (gains)/losses – – 2 1 2 1 Closing superannuation asset 61 84 – – 61 83 Actuarially assumed return on plan assets 54 52 1 1 55 53 Benefit payments (33) (31) (1) (1) (34) (32) Actuarial gains/(losses) on assets 1 2 1 1 2 3 Contributions from RBA to defined benefit schemes 20 19 – – 20 19 Contributions tax (3) (3) – – (3) (3) Exchange rate gains/(losses) – – (3) (3) (3) (3) Change in net market value of assets 39 39 (2) (2) 37 37 The components of this table may not add due to rounding. Annual report 2011 | notes to the financial statements 95
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RESERVE BANK OF AUSTRALIA ANNUAL RE
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© Reserve Bank of Australia 2011.
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The banking and payments group cont
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4 Reserve bank of Australia
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Audit Committee The objectives of t
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Roger Corbett AO Member since 2 Dec
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Committee’s questioning of the Ba
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The Reserve Bank hosts regular conf
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Reserve Bank Balance Sheet $ billio
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Days 120 100 80 60 40 20 0 Australi
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sovereign debt crisis in Europe and
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M 250 200 150 100 50 by other users
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about 10 per cent less than in 2007
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% Value of Banknotes on Issue Per c
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ppm 20 15 10 5 0 04/05 Source: RBA
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countries), the main international
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appropriate fee; the committed amou
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Economic activity in most EMEAP eco
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Page 48 and 49: Staff in the State Offices also pla
Page 50 and 51: The Reserve Bank continued to provi
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Page 54 and 55: No 50 40 30 20 10 counterfeit exami
Page 56 and 57: expected to reduce energy and water
Page 58 and 59: 4 3 2 1 0 and Securency Internation
Page 60 and 61: 40 20 Credit Exposure Per cent of b
Page 62 and 63: lost. The centrepiece of these arra
Page 64 and 65: The Reserve Bank follows commercial
Page 66 and 67: 62 Reserve bank of Australia Underl
Page 68 and 69: The Reserve Bank is committed to th
Page 74 and 75: Balance Sheet - As at 30 June 2011
Page 76 and 77: Statement of Distribution - For the
Page 78 and 79: Cash Flow Statement - For the year
Page 80 and 81: Notes to and Forming Part of the Fi
Page 82 and 83: Interest on fixed coupon securities
Page 84 and 85: Sell repurchase agreements Securiti
Page 86 and 87: Balances of asset revaluation reser
Page 88 and 89: Note 2 - Net Profits Interest reven
Page 90 and 91: Note 4 - Interest Revenue and Inter
Page 92 and 93: Note 6 - Cash and Cash Equivalents
Page 94 and 95: Note 10 - Other Liabilities Provisi
Page 96 and 97: As at 30 June 2011 and 30 June 2010
Page 100 and 101: Note 14 - Superannuation Funds (Con
Page 102 and 103: Market Risk Market risk is the risk
Page 104 and 105: Credit Risk Credit risk is the pote
Page 106 and 107: Liquidity Risk Liquidity risk is th
Page 108 and 109: Maturity Analysis - As at 30 June 2
Page 110 and 111: As at 30 June 2011 One $M Level Two
Page 112 and 113: Auditor-General for Australia Austr
Page 116 and 117: Organisational Chart August 2011 Re
Page 118 and 119: Banking and Payments Group Assistan
Page 120: Glossary ACC Asian Consultative Cou
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Reserve Bank of Australia Annual Report 2011

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