Executive Remuneration and
Appointment Procedure
Version
8.0
TRIM file number
Short description
A procedure on how to administer performance-based
remuneration for executive and senior managers.
Relevant to
Executive and senior managers of CSU
Approved by
This Procedure has been approved by the Vice-Chancellor
under the Governance (Policy and Procedures) Rule 2005
of the Council and sections 20 and 32 of the CSU Act.
Responsible officer
Executive Director, Human Resources
Responsible office
Division of Human Resources
Date introduced
16 May, 2003
Date(s) modified
4 June, 2004
1 November, 2005
30 April, 2007
30 August, 2007
27 March, 2008
9 April, 2009
21 September, 2009
8 April, 2011
Next scheduled review date
March, 2012
Related University documents
Executive Remuneration and Appointment Policy
Accountability Statements for Executive and Senior
Managers
Generic Responsibilities of CSU Staff
Guide to the Performance Management and Development
Scheme
Performance Rating Scale for Executive Staff
Related legislation
Key words
procedure, remuneration, performance management,
performance bonus, superannuation, novated lease,
accountabilities, executive managers, senior managers
Executive Remuneration and Appointment Procedure
Version 8.0 – 8 April 2011
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CONTENTS
CLAUSES
PAGE
1.
Objectives .............................................................................................................................. 3
2.
Scope ..................................................................................................................................... 3
3.
Application ............................................................................................................................. 3
4.
Roles and Responsibilities ..................................................................................................... 3
5.
Appointment of Executive and Senior Managers .................................................................. 5
6.
Assessment of Probation ....................................................................................................... 6
7.
Performance Management .................................................................................................... 7
8.
Remuneration .....................................................................................................................…9
9.
Review of Remuneration Progression Decisions ................................................................ 11
10.
Flexible Salary Packaging ................................................................................................... 12
11.
Superannuation.................................................................................................................... 13
12.
Resignation or Retirement ................................................................................................... 13
TABLE OF AMENDMENTS ........................................................................................................... 14
APPENDIX 1
Calculation of Superable Salary and Employer Contributions Oncost for Members of
the State Superannuation Scheme (SSS)
1.
Introduction ............................................................................................................................ 1
2.
Employer Superannuation Liability ........................................................................................ 1
3.
SSS Members ........................................................................................................................ 2
4.
Formula for Calculating Superable Salary and Oncost Liability ............................................ 2
5.
Employer Oncost Tables - SSS ............................................................................................. 2
6.
SASS Members ..................................................................................................................... 2
APPENDIX 2
Conditions Relating to Use and Costing of Motor Vehicles for Executive Managers and
Novated Lease Holders
1.
Introduction ............................................................................................................................ 1
2.
Class of Vehicle ..................................................................................................................... 1
3.
Option 1 ................................................................................................................................. 1
4.
Option 2
5.
Vehicles Purchased under a Novated Lease Arrangement................................................... 4
........................................................................................................................... 3
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1.
2.
OBJECTIVES OF PERFORMANCE BASED REMUNERATION
1.1
Through performance based remuneration (PBR) and performance
management, Charles Sturt University (CSU) aims to promote strong linkages
between the University Strategy, performance management and remuneration.
1.2
The objectives of PBR and performance management are to:
(a)
improve organisational performance and capability by improving individual
performance and capability;
(b)
provide the capacity to recognise and reward high performance or manage
unsatisfactory performance;
(c)
establish clear linkages between the University Strategy, performance
agreements and remuneration;
(d)
promote greater supervisor involvement in the remuneration and objective
setting process; and
(e)
support the development of a performance based culture at Charles Sturt
University (the University).
SCOPE
This Procedure applies to executive and senior managers employed at remuneration
levels 5, 4, 3, 2, 1 and above.
3.
REFERENCE
This procedure supports the "Executive Remuneration and Appointment Policy", and
applies to both executive and senior managers of the University (also called
“employees” in this Procedure), except where specific reference is made to only one of
these employee categories.
4.
ROLES AND RESPONSIBILITIES
4.1
Employee
Probation and performance management require the employee and the
supervisor to share responsibility for the planning and review of performance
objectives and professional development. To this end, the employee actively
participates in the setting of performance objectives and professional
development activities, consistent with his/her accountability statement and the
priorities of the University.
4.2
Supervisor
The supervisor is the officer to whom the employee directly reports. In addition
to being responsible for initiating and maintaining the remuneration review
process, the supervisor:
(a)
in conjunction with the employee, sets performance objectives and
professional development activities;
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4.3
(b)
reviews and rates the performance of the employee in relation to
accountabilities, performance objectives and the University’s key
objectives; and
(c)
makes a recommendation to the Senior Executive Committee or the ViceChancellor on remuneration progression or non-progression, payment or
non-payment of a performance bonus to the employee, retention or nonretention of a loading, confirmation or termination of a probationary
appointment, and/or the renewal or non-renewal of a fixed-term
appointment.
Senior Executive Committee (SEC)
4.3.1 The SEC comprises the Vice-Chancellor, Deputy Vice-Chancellors,
Executive Director, Finance and Executive Director, Human Resources.
4.3.2 The SEC’s role in relation to performance based remuneration is to:
(a)
consider advice from executive managers on the performance of
organisational areas;
(b)
consider recommendations from supervisors on remuneration
progression and performance bonus payments;
(c)
recommend to the Vice-Chancellor an appropriate percentage for
remuneration progression and performance bonus payments for
eligible managers; and
(d)
review decisions regarding remuneration progression as necessary.
(See clause 9 in this Procedure.)
4.3.3 The SEC normally meets in June each year to consider remuneration
progression and performance bonus recommendations.
4.3.4 The SEC assesses all recommendations with regard to:
(a)
the executive or senior manager’s achievements in the preceding
twelve (12) month review period;
(b)
corporate achievements in the preceding twelve (12) months;
(c)
the University’s capacity to pay; and
(d)
parity across all executive and senior managers.
4.3.5 The SEC also considers any other relevant information including, but not
limited to, reclassification of a senior management position.
4.3.6 Members of the SEC do not participate in recommendations or decisions
regarding their own remuneration.
4.4
Vice-Chancellor
4.4.1 The Vice-Chancellor (or nominee) is responsible for:
(a)
considering recommendations from the supervisor and the SEC;
(b)
varying performance ratings if considered necessary;
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(c)
determining the payment and amount of remuneration progression
and/or a performance bonus for eligible executive and senior
managers;
(d)
determining retention or non-retention of a loading; and
(e)
determining the renewal or non-renewal of a fixed-term
appointment.
4.4.2 The Vice-Chancellor advises each executive and senior manager in
writing of the remuneration decision as soon as practicable after it has
been made.
4.4.3 The Vice-Chancellor's decision is final and not subject to internal appeal
or review.
4.5
Succession Planning Committee of Council
4.5.1 The Succession Planning Committee of Council determines the
remuneration of the Vice-Chancellor and, acting on the advice of the
Vice-Chancellor, that of the Deputy Vice-Chancellors.
4.5.2 Acting on the advice of the Vice-Chancellor, the Succession Planning
Committee of Council annually reviews the remuneration rates within the
model.
5.
APPOINTMENT OF EXECUTIVE AND SENIOR MANAGERS
5.1
Appointment
The Vice-Chancellor is responsible for the appointment and renewal of fixedterm appointments, the classification of new positions, and the reclassification of
existing positions, for all positions covered by the five level remuneration model,
unless otherwise provided for in the "Policy on Delegations and Authorisations".
5.2
Renewal or Non-Renewal of an Appointment
A fixed-term appointment may be renewed at the discretion of the University for
a period of up to five (5) years. The process for the renewal or non-renewal of
an appointment prior to the conclusion of the fixed-term appointment is as
follows:
5.2.1 Step 1
Not less than nine (9) months prior to the expiration of a fixed-term
appointment, the Executive Director, Human Resources (or nominee)
writes to each executive or senior manager (the employee) for a
response as to whether he/she wishes to seek renewal of the contract.
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5.2.2 Step 2
The employee provides a written response to the Executive Director,
Human Resources in relation to Step 1 within three (3) weeks.
5.2.3 Step 3
The employee’s supervisor is asked to confirm the on-going need for the
position, or any changes.
5.2.4 Step 4
Subject to a positive response from the employee and their supervisor,
the employee is asked to prepare a written report, outlining his/her
achievements to date and goals for achievement during a further period
in the position.
5.2.5 Step 5
The supervisor convenes a committee to review the performance of the
employee over the period of the current contract and the employee’s goals
for the future. The committee should consider the employee’s written report
and interview the employee.
5.2.6 Step 6
On the basis of the employee’s written report and advice from a
committee, the supervisor makes a recommendation to the
Vice-Chancellor or the delegated officer, in accordance with the “Policy
on Delegations and Authorisations”, on the renewal or non-renewal of the
employee’s fixed-term appointment. The recommendation takes into
account the needs of the University and the employee’s performance.
5.2.7 Step 7
Other than for contracts considered by the Succession Planning
Committee of Council, the Vice-Chancellor or the delegated officer, in
accordance with the “Policy on Delegations and Authorisations”, makes
the final decision regarding any offer of a further fixed-term appointment.
5.2.8 Step 8
The Executive Director, Human Resources (or nominee) advises the
employee of the University's intention to renew or not renew the
appointment, normally not less than six (6) months prior to the expiration
of the fixed-term appointment.
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6.
7.
ASSESSMENT OF PROBATION
6.1
The assessment of an employee on probation is conducted by the supervisor
stated in the employee’s contract of employment.
6.2
An employee on probation is assessed against the accountabilities and
performance objectives for the position, and is required to fulfil any special
conditions of probation. A final review is conducted prior to the conclusion of the
probationary period.
6.3
The outcomes of probationary reviews are documented as part of the
performance agreement, with signed copies held by both the supervisor and the
employee. Either party may append comments additional to those contained in
the performance agreement.
6.4
The probationary reviews and performance agreement are confidential to the
supervisor and the employee during the probationary period, but are made
available to the Vice-Chancellor for the purposes of taking action in accordance
with subclause 6.5 of this Procedure.
6.5
At the time of the final review, the employee’s supervisor recommends to the
Vice-Chancellor, through his or her supervisor if applicable, that:
(a)
the employee’s continuing appointment be confirmed; or
(b)
the employee’s fixed-term appointment be confirmed and continue until its
expiration; or
(c)
the employee’s appointment be terminated.
6.6
The decision of the Vice-Chancellor on a recommendation made in accordance
with subclause 6.5 of this Procedure is final and not subject to internal appeal or
review.
6.7
The probationary reviews and performance agreement are forwarded to the
Division of Human Resources to be retained on the employee's personal file.
PERFORMANCE MANAGEMENT
Details of performance management for executive and senior managers are outlined in
the clauses below.
7.1
Annual Performance Planning
Annual performance planning involves employees and their supervisors in:
(a)
setting performance objectives for the coming year, based on the
employee’s accountability statement, CSU’s key objectives, the “Generic
Responsibilities of CSU Staff”, and/or feedback from surveys, quality audits
and reviews; and
(b)
negotiating a performance agreement, which includes a professional
development plan, to help meet agreed objectives for the coming year.
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7.2
Annual Performance Review
7.2.1 Achievements in relation to the performance agreement are reviewed
annually. For the purposes of both the annual performance management
meeting and performance based remuneration, the period of review is the
year from 1 April to 31 March.
7.2.2 It is expected that all executive and senior managers will strive to exceed
individual performance requirements in an effort to maximise the
University’s performance in line with the University’s strategic plans.
7.2.3 Items to be discussed in any annual performance management meeting
between an employee and his/her supervisor typically include the
following:
(a)
the employee's specific performance achievements in the past
twelve (12) months;
(b)
the employee's and University’s priorities for the coming twelve (12)
month period and the objectives by which the achievement of these
priorities will be measured;
(c)
the employee's plans for the future (e.g. long service leave, a
further appointment, new role, aspirations for their further/increased
leadership role atthe University, retirement, return to his/her
substantive position);
(d)
discussion and identification of any professional development
priorities for the employee, in line with the above expectations; and
(e)
succession planning for the employee’s position.
7.2.4 Performance agreements are to be finalised and, for ratings other than
“performs well”, submitted to the relevant Deputy Vice-Chancellor or
member of the SEC by the end on May of each year.
7.2.5 Achievement of accountabilities, performance objectives and contribution
to the achievement of the University’s key objectives are required for
executive and senior managers to be eligible for rewards such as:
(a)
remuneration progression of up to five (5) percent towards the midpoint of their level;
(b)
a performance bonus of up to five (5) percent of their current annual
remuneration for “outstanding performance”. This is a one-off, lump
sum payment that is determined annually and can be re-earned in
subsequent years;
(c)
retention of a loading (if applicable);
(d)
renewal of their fixed-term appointment; and/or
(e)
participation in the University’s professional development schemes.
7.2.6 In addition to the annual performance management meeting, regular
feedback sessions are advised.
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7.3
Performance Improvement Plan
7.3.1 Where the performance of an employee does not meet requirements,
then the supervisor and employee develop a performance improvement
plan for the employee to implement over the next 12 months, and hold a
progress meeting within six (6) months of the annual review to review
improvement in performance.
7.3.2 If the specified elements of performance improve sufficiently to be rated
as “performs well” at the progress meeting, then remuneration
progression and eligibility for participation in CSU’s professional
development schemes will recommence from the date of the progress
meeting.
7.3.3 If significant progress has not been made in relation to the performance
improvement plan by the next annual performance management meeting,
then the provisions relating to unsatisfactory performance in the
employee’s contract of employment will take effect.
7.3.4 Where the performance of a Head of School does not meet requirements,
an alternative to implementing a performance improvement plan is for the
Vice-Chancellor to terminate the Head of School appointment by giving
written notice of not less than four (4) weeks or, at the Vice-Chancellor's
discretion, payment of salary in lieu of part or all of such notice. If the
appointment is terminated by the Vice-Chancellor prior to the specified
expiry date, then the employee resumes his or her substantive
appointment, effective from the next working day following the termination
date.
8.
REMUNERATION
8.1
Annual Remuneration
8.1.1 Each remuneration level provides a “minimum”, “mid-point” and
“maximum” total employment cost (TEC). The “minimum” is calculated at
twenty (20) percent below the mid-point, and the “maximum” at twenty
(20) percent above the mid-point.
8.1.2 Acting on the advice of the Vice-Chancellor, the Succession Planning
Committee of Council annually reviews the remuneration rates within the
model, taking into account remuneration movements in both the higher
education sector and the general market, and the University’s
performance and capacity to pay. The recommendations of the
Succession Planning Committee of Council are provided to the full
Council for consideration and approval.
8.1.3 Annual remuneration moves consistently with the annual adjustment of
the mid-point. These adjustments are normally effective from 1 July
each year.
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8.2
Remuneration on Appointment
8.2.1 The commencing remuneration package (TEC: total employment cost) for
a new executive or senior manager within one of the five (5) remuneration
levels is determined by the Vice-Chancellor, taking into account factors
such as skills, knowledge, experience, internal relativities and/or
attraction/retention/market considerations.
8.2.2 Typically, new executive and senior managers to the University receive
an "entry zone" remuneration package (TEC) of between -10% and -20%
of the mid-point for the level.
8.2.3 Executive and senior managers on continuing appointments, or on fixedterm contracts with an underlying substantive continuing appointment
(e.g. Heads of School), do not normally receive a loading in excess of the
mid-point of a level, except where provided for by sub-clause 8.5 in this
Procedure.
8.3
Remuneration Progression to the Mid-Point of a Level
8.3.1 Each year an employee is eligible to move up through a level towards the
mid-point. This progress is subject to achievement of accountabilities
and performance objectives and contribution to the achievement of the
University’s key objectives over the past twelve (12) months.
8.3.2 Following the annual performance management meeting, the supervisor
may recommend remuneration progression of up to five (5) percent
towards the mid-point, based on the employee meeting or exceeding
performance requirements.
8.3.3 The Vice-Chancellor considers the supervisor’s recommendation in
consultation with the SEC. Following this consultation, the ViceChancellor approves the recommendation or, if further discussion is
required, he requests that the SEC member responsible for the portfolio
meet with the supervisor and/or employee and provide a further
recommendation.
8.3.4 The Vice-Chancellor notifies the employee in writing of his/her decision
no later than mid-July.
8.3.5 Any adjustment to remuneration normally takes effect annually from 1
July in the year that the decision on remuneration progression is made.
8.3.6 The review mechanism for remuneration movement decisions is set out in
clause 9 of this Procedure.
8.4
Bonus Payments for Outstanding Performance
8.4.1 To be eligible for a performance bonus, an employee must have worked
in the position for at least nine (9) months. Recommendations for a
bonus inside this timeframe are only approved in exceptional
circumstances. NOTE: All periods of approved paid leave are defined as
time worked in the position.
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8.4.2 Progression by bonus payment beyond the mid-point of a remuneration
level is approved by the Vice-Chancellor for a period of one (1) year. This
bonus can be re-earned in subsequent years.
8.4.3 Approval of a bonus payment is based on:
(a)
the employee's individual performance as outlined in the
performance agreement for the previous twelve (12) month review
period;
(b)
the relevant organisational area’s performance over the same
period. NOTE: The organisational area (i.e. the University,
Faculty/Division/Office or School/Centre/Department) is defined as
the level above the employee’s organisational unit. For example, a
Head of School's individual performance is assessed in conjunction
with the performance of the School and/or Faculty; and
(c)
meeting the University’s key performance indicator for staff
participation in the Performance Management and Development
Scheme.
8.4.4 The performance of the organisational areas is determined as follows:
(a)
The University’s performance is determined by the Council on the
advice of the Vice-Chancellor.
(b)
The performance of all other organisational areas is determined by
the Vice-Chancellor on the advice of the appropriate executive
manager (s) and with the assistance of the Senior Executive
Committee (SEC).
8.4.5 Where the supervisor determines that the performance of the employee
during this period is outstanding, then the supervisor:
(a)
makes a recommendation regarding the percentage of bonus
payment to be awarded to the employee (up to 5%); and
(b)
forwards the recommendation to the Senior Executive Committee,
along with the signed performance agreement as evidence of the
employee’s achievements.
8.4.6 The SEC considers the recommendation and holds further discussions
with the supervisor and/or employee if required. The SEC then forwards
the final recommendation to the Vice-Chancellor for consideration.
8.4.7 Bonus payments are one-off payments made as a lump sum and may be
awarded each year. They are taxable and non-superable, but are able to
be salary packaged. There should be no expectation of regular bonus
payments.
8.5
Attraction/Retention Allowances
8.5.1 An attraction/retention allowance is available above the mid-point in order
for the University to attract or retain the expertise of a particular executive
or senior manager.
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8.5.2 Attraction/retention allowances are ongoing and superable, and the
amount may be reviewed as part of the performance management
process on an annual basis.
9.
REVIEW OF REMUNERATION PROGRESSION DECISIONS
Where an employee, other than a member of the SEC, has concerns regarding the
process undertaken by the supervisor to assess performance and/or perceives bias in
the decision on remuneration progression, then the following process applies.
9.1
Step 1
9.1.1 The employee notifies the supervisor of his/her concerns, and they
attempt to resolve the matter; or
9.1.2 If an attempt to resolve the matter at the supervisory level has already
been made and a resolution has not been achieved, then the matter is
referred to the supervisor's manager for resolution.
9.2
Step 2
9.2.1 If the concerns of the employee remain unresolved following Step 1, then
the matter is referred to the SEC for consideration and recommendation
to the Vice-Chancellor. The employee is required to provide written
details of his/her concerns to the SEC.
9.2.2 After finalising its review, the SEC advises all parties involved, including
the Vice-Chancellor, in writing of its recommendation(s).
9.2.3 Where a member of the SEC has been involved in the resolution process,
then he/she is not permitted to participate in the review process or the
formulation of the SEC’s recommendation.
9.3
Step 3
The Vice-Chancellor's decision on the recommendation(s) of the SEC is final and
not subject to internal appeal or review.
10.
FLEXIBLE SALARY PACKAGING
10.1 Flexible salary packaging is available at the University. (See "Guidelines for the
CSU Voluntary Salary Packaging Scheme": http://www.csu.edu.au/division/finserv/staff/forms/salary_packaging_guidelines_
%20july_2006.pdf )
10.2 The range of benefit options provided are periodically reviewed to ensure
relevance. Options include a motor vehicle, University childcare, computer
products, corporate uniform, subscriptions to professional associations, tuition
fees, and contributions to qualifying superannuation funds. The benefits chosen
for inclusion in a salary package may be extended to meet individual
circumstances after discussion with an independent financial advisor.
10.3 Executive managers at Levels 3 and above are eligible to package a motor
vehicle for business and private use on a percentage basis. Other senior
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employees may enter into a novated lease arrangement for a motor vehicle.
(See Appendix 2 of this Procedure.)
10.4 To facilitate this flexibility option, eligible executive and senior managers are
permitted to salary package up to 100% of their total remuneration package
(TEC). The provision of this clause is available to all continuing and fixed-term
executive and senior managers, provided that the fixed-term appointment is for a
minimum period of twelve (12) months.
10.5 The type of benefit available to an executive or senior manager, e.g. novated
lease of a motor vehicle, is dependent upon its suitability to the length of the
employee's appointment.
10.6 Flexible salary packaging requires the employeeto meet the full cost of the
provision of such benefits as well as associated taxation and administration
costs.
10.7 Participation in flexible salary packaging is voluntary.
10.8 Disclaimer
10.8.1 Executive and senior managers are advised to seek independent
financial advice on the implications of flexible salary packaging. It is
emphasised that decisions about participation and the best mix of
benefits must be made by individual employees in the light of their own
circumstances and independent financial advice.
10.8.2 The University does not accept responsibility for any consequences that
may flow from an executive or senior manager’s participation in flexible
salary packaging.
10.8.3 The University reserves the right to cease operation of or to review and
amend the flexible salary packaging arrangements (subject to the
constraints of existing contractual obligations), with reasonable notice.
11.
SUPERANNUATION
11.1 The base or "nominated" salary is the salary rate determined by subtracting the
executive or senior manager’s statutory employer cost to superannuation from
the total remuneration package (TEC).
11.2 For members of UniSuper, this figure is currently 14% plus the 3% Basic Benefit
levy. For members of the SSS, the percentage varies according to age at entry
to the scheme, and is calculated according to the actuarial chart in Appendix 1 of
this Procedure and the Basic Benefit levy. For members of the SASS, the oncost
percentage is determined on an individual basis by the fund administrator. The
University will request an employer liability cost for each SASS member at the
review date each year (April).
11.3 The nominated salary is the "superable salary" used for notifying the relevant
superannuation fund. This is the maximum amount of remuneration that an
employee can elect to receive as PAYG salary (where PAYG salary means
remuneration by way of regular periodical cash payments subject to PAYG tax).
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11.4 For the purposes of sub-clause 11.3, the following items do not count as
superable salary:
(a)
employer contributions to superannuation;
(b)
other cash payments (e.g. entertainment) made for the benefit of the
executive or senior manager;
(c)
one-off, lump sum payments for performance bonuses; or
(d)
cash payments made to the employeeby way of reimbursement of
expenses incurred by the employee (e.g. travel costs).
11.5 Temporary loadings and allowances that are part of the PAYG salary are not
included as superable salary for the purposes of the salary package, unless
provided for under the rules of the relevant superannuation fund. Examples of
temporary loadings and allowances include:
12.
(a)
performance loadings which are reviewable; and
(b)
higher duties allowances, including secondments.
RESIGNATION OR RETIREMENT
Upon resignation, retirement or movement out of an eligible category of employees, an
executive or senior manager’s accrued and related leave entitlements are paid at the
TEC rate. The unused portion of other benefits is "cashed out" on a pro rata basis and
PAYG deductions made accordingly. For these purposes, the "package" year is 1
July to 30 June.
APPENDICES
1.
Calculation of Superable Salary and Employer Contributions Oncost for
Members of the State Superannuation Scheme (SSS)
2.
Conditions Relating to Use and Costing of Motor Vehicles for Executive
Managers and Novated Lease Holders
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APPENDIX 1
Calculation of Superable Salary and Employer Contributions Oncost
for Members of the State Superannuation Scheme (SSS)
1.
INTRODUCTION
1.1. The elements that comprise an employee’s remuneration package (TEC: total
employment cost) are matters for negotiation between each employee and the
University. An employee is required to contribute a specific proportion of his/her
remuneration towards superannuation, as required under the terms of his/her
superannuation scheme.
1.2
Superannuation is a complex area, particularly the rules that govern the State
superannuation schemes. For this reason, it is strongly recommended that
employees obtain professional, independent advice based on their individual
circumstances.
1.3
The minimum superable salary that can be nominated at entry to a
superannuation fund or any subsequent superannuation review day is the
monetary remuneration payable, i.e. the cash salary component. This is
generally an employee’s salary for income tax (PAYG) purposes, excluding any
performance related incentive payments.
1.4
The maximum superable salary that is possible for an employee to nominate is
the TEC (not including performance related incentives), less the employee’s
employer statutory superannuation contribution (oncost) liability.
NOTE:
The employer statutory superannuation contribution does include the
Basic Benefit contribution.
1.5
2.
In accordance with sub-clause 9.4 of the “Procedure for Performance Based
Remuneration and Performance Management for Executive and Senior
Managers”, an employee may salary package up to 100% of his/her total
remuneration package. If an employee has before-tax elements in his/her
remuneration package, then the superable salary figure may be higher than the
cash salary.
EMPLOYER SUPERANNUATION LIABILITY
2.1
An employee is required to meet the University's liability for the superannuation
benefits that are accrued during his/her employment with the University. This
liability, known as the employer oncost, is paid from before-tax income. It is
additional to the personal (employee) contributions that members of SASS and
SSS are required to pay to their schemes from after-tax income. Personal
contributions to any other approved fund are optional.
2.2
The employer oncost liability varies according to the superannuation scheme or
schemes of which the employee is a member. It is determined as a percentage
of an employee’s superable or "nominated" salary, and determined in
accordance with actuarial advice. Therefore, the actual dollar amount of an
employee’s oncost liability depends on his/her superable salary figure.
Calculation of Superable Salary and Employer Contributions Oncost
Page 1
3.
2.3
The percentage of superable salary required to be contributed by an employee to
meet the employer liability oncost to the scheme of which the employee is a
member is determined by the scheme’s trustee in accordance with actuarial
advice.
2.4
The maximum employer oncost percentage payable by any member of SSS is
30% of his/her superable salary.
SSS MEMBERS
If an employee is a member of SSS, the oncost percentage is determined by reference
to a specific table pertaining to the scheme. When the SSS oncost percentage has
been determined, it stays the same until the normal scheme retirement age of 60 (or
55 in the case of a woman contributing to SSS for retirement at the younger age) is
reached.
4.
FORMULA FOR CALCULATING SUPERABLE SALARY AND ONCOST LIABILITY
The formula to calculate the maximum nominated superannuation salary is:
5.
6.
MAX
=
(T - S) ÷ (1.000 + C)
MAX
is
the maximum nominated salary
T
is
the total remuneration package
S
is
the employer oncost of any other superannuation
arrangement that the employee may have entered
into (which in most cases will be nil)
C
is
the package oncost value from the employer
oncost table
EMPLOYER ONCOST TABLES - SSS
5.1
The employer oncost percentage to be paid depends on the employee’s age
when he/she joined the scheme as well as his/her gender. In other words, the
older an employee upon joining the scheme, the higher the oncost. The oncost
percentage also depends on whether the employee joined the scheme before or
after 1 July 1963.
5.2
The percentages in Table 1 are those that apply on a birthday at the age shown.
The formula for calculating the oncost takes into account the number of days (if
any) between the birthday and the date of commencement of employment.
SASS MEMBERS
If an employee is a member of SASS, the oncost percentage is determined on an
individual basis by the fund administrator. The University will request an employer
liability cost for each SASS member at the review date each year (April).
Calculation of Superable Salary and Employer Contributions Oncost
Page 2
Table 1: Employer oncost as % of nominated superable salary for SSS members
State Superannuation Scheme
Pre 01 July 1963 Members
Post 30 June 1963 Members
Exact age
on entry to
scheme
Males
%
Females
R55
%
Females
R60
%
Males
%
Females
R55
%
Females
R60
%
16
8.6
8.1
6.5
7.4
7.1
5.6
17
8.7
8.2
6.6
7.5
7.2
5.7
18
8.9
8.4
6.7
7.7
7.4
5.9
19
9.2
8.7
6.9
8.0
7.7
6.1
20
9.6
9.1
7.1
8.4
8.1
6.4
21
10.1
9.6
7.4
8.8
8.6
6.7
22
10.5
10.2
7.9
9.2
9.1
7.1
23
11.0
10.9
8.3
9.6
9.7
7.5
24
11.4
11.5
8.9
10.0
10.3
8.0
25
11.9
12.3
9.4
10.4
11.0
8.5
26
12.3
13.1
10.1
10.8
11.7
9.1
27
12.8
14.2
10.9
11.3
12.5
9.7
28
13.4
15.2
11.6
11.8
13.4
10.3
29
14.0
16.3
12.4
14.4
14.4
11.0
30
14.7
17.3
13.1
13.0
15.5
11.7
31
15.5
18.7
14.0
13.7
16.7
12.5
32
16.3
20.1
15.0
14.5
18.0
13.3
33
17.2
21.5
16.0
15.3
19.4
14.2
34
18.1
23.1
17.0
16.1
20.9
15.1
35
19.1
24.7
18.0
17.0
22.5
16.0
36
20.6
26.4
19.1
17.9
24.2
17.0
37
22.1
27.5
20.2
18.9
26.1
18.1
38
23.7
27.5
21.5
20.0
27.5
19.2
39
25.4
27.5
22.9
21.3
27.5
20.5
40
25.7
27.5
24.4
22.8
27.5
21.9
41
27.5
27.5
26.1
24.4
27.5
23.4
42
27.5
27.5
27.5
26.2
27.5
25.1
43
27.5
27.5
27.5
27.5
27.5
26.9
44
27.5
27.5
27.5
27.5
27.5
27.5
45 +
27.5
27.5
27.5
27.5
27.5
27.5
NB The above figures are exclusive of the Basic Benefit levy.
Calculation of Superable Salary and Employer Contributions Oncost
Page 3
APPENDIX 2
Conditions Relating to Use and Costing of Motor Vehicles for
Executive Managers and Novated Lease Holders
1.
INTRODUCTION
These guidelines cover the costing of a motor vehicle allocated to an executive
manager of CSU who has elected to take a fully maintained motor vehicle as part of a
total remuneration package or a vehicle purchased under a novated lease scheme.
2.
CLASS OF VEHICLE
2.1
The level or class allowable under the conditions of the salary package for
options (1) and (2) is:
Vice-Chancellor
Executive Levels 3, 2, 1
and above
3.
No limit, subject to approval by the Chancellor
Holden Statesman
2.2
The value of the motor vehicle component of the salary package for executive
managers at Levels 3, 2, 1 and above is based on the value of a Holden
Statesman. The actual vehicle allocated to an executive manager is determined
by the Executive Director, Financial Services, based on the most favourable
purchase/resale value for the University.
2.3
Executive managers at Levels 3, 2, 1 and above who have University-wide
administrative responsibility have a University owned motor vehicle assigned to
their office for official purposes. These managers may then elect to purchase a
private use component of that vehicle under option (1) or (2) below.
2.4
Executive managers at Levels 3, 2, 1 and above who do not have a Universitywide responsibility and therefore do not have a University owned motor vehicle
assigned to their office may still elect to take a fully maintained vehicle as part of
a remuneration package but only under option (1) below.
2.5
Executive managers may not alter their chosen option during the financial year.
OPTION 1
3.1
Use of a Vehicle
3.1.1 Vehicles offered on this basis are charged for 40% private use and 60%
business use. Although executive managers have priority use of the
vehicle, it must be made available to other staff between the hours of
9:00am and 5:00pm on week days.
3.1.2 Vehicles purchased under this scheme may be used by executive
managers and members of their families holding an Australian driver's
licence.
3.1.3 Under no circumstances is smoking permitted in the vehicle.
Conditions Related to Use and Costing of Motor Vehicles
Page 1
3.2
Selection of a Vehicle
3.2.1 An individual executive manager may select any motor vehicle up to the
value of a Holden Statesman sedan, provided the vehicle chosen is on
government contract.
3.2.2 If a vehicle of a lesser value is selected, there is a corresponding reduction
in the amount charged against the salary package.
3.2.3 For the purpose of calculating the purchase price of a vehicle and the
subsequent cost to a package, the list price as published in "Wheels" motor
magazine is used.
3.2.4 The vehicle, in which the University retains all equity, is replaced under the
prevailing University policy, currently at nine months or 15,000 km.
3.2.5 Executive managers are responsible for managing the vehicle, presenting
it for regular maintenance, and complying with legal and insurance
requirements should an accident occur.
3.2.6 The vehicle is to be secured each night off the street, preferably in a locked
garage.
3.2.7 Executive managers are given the opportunity to purchase from the
university the vehicle allocated to them, when it is due for replacement, i.e.
when it has been used by the manager for nine (9) months or has covered
15,000 km, or on the retirement of the executive Manager. The purchase
price is the average of three quotations, obtained by the Transport Office
from three independent, licensed motor vehicle dealers.
3.3
Kilometre Allowance
3.3.1 The kilometre allowance for each vehicle is 40,000 km per annum, made
up of an allowance of 16,000 km for private use and 24,000 km for official
use.
3.3.2 The only exception applies to the Vice-Chancellor, where the private
component is 8,000 km and the official component 32,000 km.
3.3.3 Travel to and from CSU each day is deemed to be private travel.
3.4
Keeping of a Motor Vehicle Log Book
3.4.1 There is no necessity to keep a motor vehicle log book unless:
(a)
private use is less than 16,000 km per annum component and the
individual requests a corresponding reduction in the amount charged
to the package; or
(b)
a vehicle travels in excess of 40,000 km per annum and the official
component has been greater than 24,000 km. Evidence of this fact
is required; otherwise, the package is charged with the kilometres
travelled in excess of 40,000.
Conditions Related to Use and Costing of Motor Vehicles
Page 2
3.4.2 Where a vehicle travels in excess of 40,000 km per annum and no log
sheet has been maintained, each kilometre is deemed to be private use
and charged to the package at the rate of 30 cents per kilometre. (30
cents is the University’s current calculated actual cost per kilometre for
running its combined vehicle fleet, and is adjusted on 1 January each
year.)
3.5
Odometer Reading
On 1 July each year, the Executive Director, Financial Services obtains the
odometer reading from each vehicle for the purpose of the above calculations.
3.6
Costing of a Motor Vehicle
The motor vehicle is costed against the pre-tax salary of an executive manager.
The cost components are the Fringe Benefits tax which is based on the number
of kilometres the vehicle travels in the tax year, a "per kilometre" running cost,
foregone interest and a share of the profit or loss on sale. The Fringe Benefits
tax calculation is based on the statutory formula method.
4.
OPTION 2
4.1
Use of a Vehicle
4.1.1 Vehicles are offered on the basis that the executive manager pays from
his/her after-tax salary all private kilometres for the past month, at the
current "per kilometre" rate, as shown on the official invoice and based on
the daily log sheet details.
4.1.2 Although the executive manager has private use of the vehicle, it must be
available to other staff between the hours of 9:00am and 5:00pm on week
days.
4.1.3 Vehicles purchased under this scheme may be used by executive
managers and members of their families holding an Australian driver's
licence.
4.1.4 Under no circumstances is smoking permitted in the vehicle.
4.2
Selection of a Vehicle
4.2.1 An executive manager may select any motor vehicle up to the value of a
Holden Statesman vehicle, provided the vehicle chosen is on government
contract. The vehicle, in which the University retains all equity, is replaced
under the prevailing University policy, currently at nine (9) months or
15,000 km.
4.2.2 Executive managers are responsible for managing the vehicle, presenting
it for regular maintenance, and complying with legal and insurance
requirements should an accident occur.
4.2.3 The vehicle is to be secured each night off the street, preferably in a locked
garage.
Conditions Related to Use and Costing of Motor Vehicles
Page 3
4.2.4 Executive managers are given the opportunity to purchase from the
University the vehicle allocated to them, when it is due for replacement, i.e.
when it has been used by the manager for nine (9) months or has covered
15,000 km, or on the retirement of the executive manager. The purchase
price is the average of three quotations, obtained by the Transport Office
from three independent, licensed motor vehicle dealers.
4.3
Keeping of a Motor Vehicle Log Book
4.3.1 A log book must be maintained at all times. All details of official and
private use of the vehicle must be recorded on the log sheet.
4.3.2 On the last day of each month, the executive manager forwards a copy of
the log sheet to the Executive Director, Financial Services. An official
invoice will then be raised for the private use component of the kilometres
travelled.
4.3.3 The invoice cost is to be met from the executive manager’s after-tax
earnings. (The current rate per kilometre for private use of the vehicle
is30 cents per kilometre. This rate is adjusted annually in line with the
Fringe Benefits tax legislation and University’s motor running costs.)
4.4
Odometer Reading
On 1 July each year, the Executive Director, Financial Services obtains the
odometer reading from each vehicle for the purpose of the above calculations.
4.5
Costing of Motor Vehicle
4.5.1 The invoice for the cost of the motor vehicle is to be met from the executive
manager’s post tax earnings. The cost of the motor vehicle will be costed
on the basis of the log sheet kept by the executive manager.
4.5.2 An official invoice will be raised each month and the private kilometres
travelled will be charged at the rate of 30 cents per kilometre. This rate will
be reviewed annually in line with fringe benefits tax legislation and
University motor vehicle running costs.
4.5.3 The fringe benefits tax liability for the private use component of the motor
vehicle is based on the total number of kilometres the vehicle travels in the
year ended 31 March and is based on the statutory formula method.
4.5.4 If the calculated annual fringe benefits tax amount exceeds the total
amount paid by the executive manager from after tax earnings, the
executive manager's package will be charged with the excess.
5.
VEHICLES PURCHASED UNDER A NOVATED LEASE ARRANGEMENT
5.1
General
Under the terms of the flexible salary package, the option to select a motor
vehicle purchased under a novated lease arrangement and paid for from pre-tax
dollars is now available to all executive managers and other employees.
Conditions Related to Use and Costing of Motor Vehicles
Page 4
5.2
Selection of a Vehicle
There is no limit to the type of vehicle selected.
5.3 Use of a Vehicle
5.3.1 The vehicle may be used for unlimited private use by the employee and for
limited official use.
5.3.2 The official use is limited to inter campus travel authorised on an official
travel order of the University and properly authorised by a delegated
officer.
5.3.3 The reimbursement is made at the prevailing rate for use of a private
vehicle (currently 30 cents per kilometre).
5.4
Keeping of a Motor Vehicle Log Book
The University does not require a log book to be kept. However, the employee
electing to purchase a vehicle under this option must keep a log sheet for their
personal taxation records.
5.5
Odometer Reading
The odometer reading is required on the last day of each month.
5.6
Costing of a Motor Vehicle
5.6.1 All costs associated with the lease and running of the motor vehicle are
met from the pre-tax salary of the employee, based on an agreed monthly
deduction. At least once each year, the agreed deduction is reviewed in
line with a comparison of actual costs against the budget.
5.6.2 At the end of the lease period (usually three years), the employee may
purchase the vehicle for an agreed, written down amount.
Conditions Related to Use and Costing of Motor Vehicles
Page 5
Table of amendments
Version
number
Date
Short description of amendment
2.0
4/6/2004
Remuneration Committee of Council renamed Corporate Governance and
Nominations Committee of Council.
Change to wording in 3 – Senior Employees and Total Employment Cost
(TEC).
Deletion of 6.1 and subsequent renumbering.
Deletion of “superannuation” in first line of 10.1.
Addition of references to 3% Basic Benefit levy in 10.2.
Deletion of non-cash benefits in 10.4.
Appendix 1:
Deletion of “not” in 1.4 Note.
Deletion of 1.6.
Deletion of 5.1.
Addition NB at foot of Table 1.
Appendix 2:
Deletion of “six cylinder” vehicles.
Deletion of “once only” option in 2.5.
Change to cost of private use of vehicle in 4.3.3 and 5.3.3.
Deletion of reference to executive or senior staff in 5.
3.0
1/11/2005
Re-formatted.
Sub-clause 1.2 – rewarding high performance and management of
unsatisfactory performance added.
Sub-clauses 3.5 & 3.6 – definitions of continuing appointment and fixed
appointment updated.
Sub-clause 4.4.1 – retention of loading and renewal of appointment added
to VC’s responsibilities.
Sub-clauses 3.3, 4.2, 6.1.1, 6.2.3, 6.2.4, 7.2.1 and 7.3.1.7 – performance
review and rating based on achievement of accountabilities and
performance objectives and contribution to the achievement of CSU’s key
objectives required for rewards.
Sub-clause 6.2.5 – outcomes/indicators replaced by objectives.
Sub-clause 7.3.2 – review of attraction/retention allowances included in
performance management process.
4.0
30/4/2007
Glossary deleted because it is attached to the policy.
4.3.2 – SEC to consider recommendations from executive managers
about the performance of organisational areas.
6.1.1a – Generic Responsibilities and feedback from surveys, audits and
reviews added as basis for performance objectives.
Appendix 1 – performance rating scale revised.
6.2.3 – finalisation of performance reports and Staff Participation Report
added.
6.2.4, 6.2.6f, 7.3.5 & 7.4.1.8 – remuneration progression of 5%, bonuses
of 2.5% and 5%, and participation in professional development schemes
added to rewards.
6.2.6e – no unresolved issues in relation to Generic Responsibilities
added.
6.3.1-6.3.4 – performance improvement plan revised.
7.1 – annual remuneration added.
Executive Remuneration and Appointment Procedure
Version 7.1 – 21 September, 2009
7.3.3 – consultation with the SEC added.
7.3.4 – one month replaced by mid-July.
7.3.7 – 20% below the mid-point added.
7.4.1.4 – meeting the University’s KPI added.
9.4 – salary packaging increased to a maximum of 100%.
10.2 – SASS added.
10.4 – performance bonuses and travel costs added.
5.0
30/8/2007
Clause 3 – definitions deleted because they are in policy.
3.4.3 & 8.3 – “not subject to internal appeal or review” added.
5 – assessment of probation moved from policy to procedure.
6 – performance management details in Performance Management
Scheme’s Policy and Procedure; deletion of information contained in
Performance Management Scheme Procedure.
7.4 – “Remuneration above the mid-point” renamed as “Performance
Bonus Payments”.
9.4 – “ongoing” replaced by “continuing”.
10.2 – SSAU Scheme deleted.
6.0
27/3/2008
Sub-clause 3.3 – “performance bonus payments” changed to
“remuneration progression”.
7.3.2 – “new” deleted before “mid-point”.
7.3.4 – Meeting between supervisor and employee deleted.
7.0
9/4/2009
Clause 2 – scope added.
4.1-4.2 – probation and professional development added.
4.4.1 – VC’s authority to vary performance ratings added.
4.5.2 – deleted information that is in 8.1.2.
5.2.1-5.2.3 –“advice” changed to “written response”.
5.2.3 – advice from a committee added.
Old 6.2.4 deleted – re examples of “meets requirements” and “outstanding
performance”.
7.2.2 added – expectation of exceeding requirements.
7.2.4 – “performance management plans” changed to “performance
agreements”; submission date changed from 31 May to 24 May.
7.2.5a, 8.3.2& 8.4.5a – up to 5% specified for remuneration bonus.
7.2.5b – bonus changed to “up to 5%”.
7.2.6 added – re regular feedback sessions.
7.3.3 – “AWA” changed to “contract of employment”.
Old 7.3.6 deleted – re normal progression time.
Old 7.4.1 deleted – information is in 8.4.7.
Old 7.4.5 deleted – information is in 7.2.3.
8.4.5 – “exceeded requirements” deleted from bonus.
8.4.5b – summary replaced by performance agreement as evidence of
achievements.
7.1
21/9/2009
7.2.4 & 7.3.2 – “meets requirements” changed to “performs well”.
8.0
8/4/2011
Minor amendment to language, policy and committee names.
5.2-3.5.2.5 – additional procedural steps to increase clarity regarding
renewal or non-renewal of appointments.
Executive Remuneration and Appointment Procedure
Version 8.0 – 8 April, 2011