2018-19 ANNUAL REPORT
THE PUBLIC TRUSTEE
2018-19 Annual Report
The Public Trustee
211 Victoria Square ADELAIDE SA 5000
GPO Box 1338 ADELAIDE SA 5001
publictrustee@sa.gov.au
Contact phone number: 08 8226 9200
Contact email: ptenquiries@sa.gov.au
ISSN: 1441-2799 (Print) 1836-263X (Online)
Date presented to Minister: 25 September 2019
To The Honourable Vickie Chapman MP
Deputy Premier
Attorney-General
This annual report will be presented to Parliament to meet the statutory reporting requirements of the Public Trustee Act 1995 and the Public Sector Act 2009 and the requirements of Premier and Cabinet Circular PC013 Annual Reporting.
This report is verified to be accurate for the purposes of annual reporting to the Parliament of South Australia.
Submitted on behalf of the Public Trustee by:
Nicolle Rantanen
The Public Trustee (Acting)
25 September 2019
From the Public Trustee
The Public Trustee’s purpose is to provide financial and administrative services to eligible South Australians, to help those that cannot manage their own affairs and those who have trusted the organisation to assist them.
During 2018-19 the Public Trustee updated its Strategic Plan for 2019-2021. The core objectives of the organisation are to provide a positive customer experience, improve the way services are delivered, ensure appropriate governance and financial sustainability and support the people delivering that service. The continued focus has and will be on cultural change, wellbeing, workforce planning, training, recognition and improving the customer experience.
During 2018-19 the Public Trustee continued to address recommendations of the Independent Commissioner Against Corruption’s (ICAC) Evaluation of the Practices, Policies and Procedures. This has included streamlining policies and procedures, increased training of staff, improving staff communication as well as ensuring robust procurement processes. We have continued to report to the Commissioner on progress against his recommendations.
There have been a number of changes announced to the Public Trustee services which will be implemented over 2019-20 and 2020-21. These include changes to eligibility for Will and Enduring Power of Attorney making services and ceasing to provide an investment service for private investors under Section 29 (1) (b) of the Public Trustee Act 1995. The implementation of these reforms is aimed at returning the Public Trustee back to its core business as a trustee, executor and administrator. Over 84,000 letters were sent to existing Will and Enduring Power of Attorney holders during the year advising them of the changes.
The operations of the Public Trustee have been improved in 2018-19 by:
- Taking an incremental approach to modernising the existing electronic systems. As part of this approach, the Public Trustee implemented telephone call and management recording in January 2019. The technology was used to establish dedicated phone lines and queues to support the changes to Will making and Section 29 (1) (b) investors. The system will continue to be enhanced over time and will form part of staff coaching and training.
- Strengthening investment governance with the appointment of an external Independent Investment Chair.
- The development of a series of dashboards that monitor performance against service standards and key areas of service provision to improve the customer experience.
- Strengthening our staff training regime, improved staff consultation and organisational changes to improve workforce capacity and capability.
- An annual staff recognition event has also been implemented.
As part of the 2018-19 State Budget, a Community Service Obligation framework was approved and implemented to fund the Public Trustee’s non-commercial services.
The Public Trustee’s profit for 2018-19 was $4.938m.
All investment options finished with positive returns, despite a volatile start to the financial year. Growth oriented strategies with a higher weighting to shares, property and infrastructure were the best performers.
In terms of market performance the Public Trustee’s more conservative investment style with a focus on value and quality led to some underperformance from benchmark over the last 12 months, due to a rally in high growth/speculative stocks within the market. The Public Trustee’s investment returns ranged from 1.92% for cash to 4.54% for growth, net of fees.
The State Government has also announced its intention to merge the Public Trustee and the Office of the Public Advocate, under reforms aimed at improving services to vulnerable South Australians. The proposed merger would see customers and clients who currently use the services of both the Public Trustee and Office of the Public Advocate dealing with one agency that addresses all of their needs, providing a more consistent and coordinated service.
Nicolle Rantanen
The Public Trustee (Acting)
Contents
Legislation administered by the agency
Agency contribution to whole of Government objectives
Agency specific objectives and performance
Employment opportunity programs
Agency performance management and development systems
Work health, safety and return to work programs
Executive employment in the agency
Financial performance at a glance
Strategies implemented to control and prevent fraud
Reporting required under any other act or regulation
Number of public complaints reported
Appendix 1: The Public Trustee Services 2018-19
Appendix 2: Audited financial statements 2018-19
Overview: about the agency
Our strategic focus
| Our Purpose | We provide financial and administrative services to eligible South Australians. We help those who cannot manage their own affairs, and those who have trusted us to assist them. |
| Our values | Service
Proudly serve the community and Government of South Australia
Professionalism Strive for excellence
Trust We have confidence in the ability of others
Respect We value every individual
Collaboration and Engagement We create solutions together
Honesty and Integrity We act truthfully, consistently, and fairly
Courage and Tenacity We never give up
Sustainability We work to get the best results for current and future generations of South Australians
|
| Our objectives | The Public Trustee’s Strategic Plan includes the following objectives;
People We will be a workplace of choice. Our staff will be engaged in our culture and feel empowered by leaders to develop their skills and capabilities. Customer Experience We will engage with our customers to understand their needs, and deliver a consistently high quality service, treating them with empathy and respect. Continuous Business Improvement Our environment will encourage staff to collaboratively engage with business improvement ideas and initiatives, to find new ways to work and deliver excellent service to our customers. Governance & Financial Stability We will be supported by good governance that effectively manages risk, while meeting our agreed fiscal and service targets. |
Our organisational structure
Changes to the agency
During 2018-19 the following changes to the agency’s structure and objectives were announced.
These changes to services will take effect from 1 July 2019 onwards.
Will & Enduring Power of Attorney Eligible Customers
From 1 July 2019, the Public Trustee will be changing the way it delivers Will making and Enduring Power of Attorney services. Previously, these services were available for free to all South Australians. However, from July 1 2019, these services are only available to eligible concession holders or those subject to administration or protection orders issued by the South Australian Civil and Administrative Tribunal (SACAT) or the Courts.
To be eligible, a person must hold one of the following concession cards:
- Pensioner Concession Card
- Gold Card from the Department of Veterans’ Affairs (DVA)
- Totally and Permanently Incapacitated (TPI)
- Extreme Disablement Adjustment (EDA)
- War Widow
- DVA Gold Card issued to a person with 80 or more overall impairment points under the Military Rehabilitation and Compensation Act 2004
- Low Income Health Care Card
- Commonwealth Seniors Health Card
Or receive one of the following Centrelink payments:
- Newstart Allowance
- Sickness Allowance
- Widow Allowance
- Youth Allowance
- Partner Allowance
- Parenting Payment
- Special Benefit
- Community Development Employment Project (CDEP)
- New Enterprise Incentive Scheme (NEIS)
- ABSTUDY
- Austudy
- Farm Household Allowance
- War widow pension under legislation of the United Kingdom or New Zealand.
Changes to Investment Services
The Public Trustee has previously accepted money from a variety of approved investors under Section 29 (1) (b) of the Public Trustee Act 1995.
The Public Trustee Act 1995 provides that the Minister may approve classes of persons that can invest money with the Public Trustee (Section 29(1) (b)).
Up until 30 June 2019 that approval included the following classes of people:
- Wills and customers of the Public Trustee
- Beneficiaries of estates and trusts administered by the Public Trustee, when funds would otherwise be distributed
- Trustees of estates and trusts
- Trustees of charitable funds
- Religious organisations
- Trusts of Self-Managed Superannuation Funds
- Staff
The government does not consider that investing funds other than as part of its role in administering client money is the core business of the Public Trustee.
From 1 July 2019 the Public Trustee has ceased accepting any new deposits, with the service to be fully phased out by 30 June 2021. This will enable the existing clients (approximately 230) sufficient time to seek the necessary accounting and taxation advice, and arrange for an alternative investment provider.
The State Government has announced its intention to merge the Public Trustee and the Office of the Public Advocate, under reforms aimed at improving services to vulnerable South Australians
The proposed merger would see customers and clients who currently use the services of both the Public Trustee and Office of the Public Advocate dealing with one agency that addresses all of their needs, providing a more consistent and coordinated service.
The Public Advocate (opa.sa.gov.au) advocates on behalf of South Australians with a mental incapacity, investigating matters where an individual with a mental incapacity is at risk and can also manage decisions relating to a mentally incapacitated client’s accommodation, health, lifestyle and access.
It is important to note that the proposed merger will require legislative change – meaning that State Parliament will ultimately decide if the merger proceeds.
Our Minister
The Hon Vickie Chapman MP, Deputy Premier and Attorney-General is the state’s principal legal advisor to the government and responsible for the administration of justice. The Attorney-General is a member of Cabinet and responsible for:
-specific legislation and the state’s legal system
-developing and implementing policy
-legal action relevant to the state government.
Our Executive team
Nicolle Rantanen
The Public Trustee (Acting)
The Public Trustee is responsible to the Attorney-General for the efficient management of the Public Trustee Office and the effective implementation of the Public Trustee Act 1995. The role encompasses acting as administrator, executor or trustee of deceased estates, as administrator of estates of protected persons under the Guardianship and Administration Act, as manager of estates of protected persons under the Aged and Infirm Persons’ Property Act and as attorney or agent. The Public Trustee is also the trustee for minors as a result of distributions in intestate estates administered by private administrators and by appointment as trustees for other trusts and Wills.
Tony Brumfield
General Manager Business and Client Financial Services
The General Manager Business and Client Financial Services oversees a comprehensive range of business and support services including ICT systems, corporate financial and administrative services, risk management and human resources. The role is also responsible for financial services for customers including financial management and reporting, accounts payable and receivable, investment services and taxation and superannuation services.
Kevin Kelly
General Manager Customer Services
The General Manager, Customer Services ensures the delivery of high quality deceased estate, trust, financial administration, Will-making and litigation guardian services. The role provides high level leadership to develop and implement business reform strategies to enhance the customer’s experience and create a positive service focused culture.
Legislation administered by the agency
Public Trustee Act 1995
Under the provisions of Section 5(2) of the Public Trustee Act 1995, the Public Trustee may act as: a trustee, executor of a Will, administrator of an estate (whether or not of a deceased person), manager, receiver, committee, curator, guardian, next friend, agent, attorney, or stakeholder.
Other Acts that form the basis of how, and which, Public Trustee services are delivered to customers are as follows:
Administration and Probate Act 1919
Aged and Infirm Persons’ Property Act 1940
Family Relationships Act 1975
Guardianship and Administration Act 1993
Inheritance (Family Provision) Act 1972
Legal Practitioners Act 1981
Powers of Attorney and Agency Act 1984
South Australian Civil and Administrative Act 2013
Trustee Act 1936
Wills Act 1936
Other related agencies
The Public Trustee is a business unit of the South Australian Attorney-General’s Department (AGD) and as such complies with AGD policies. The Public Trustee employees are employees of the AGD.
The Public Trustee works closely with SACAT who appoints the Public Trustee to administer the personal financial and/or legal affairs of people who are unable to manage their own affairs. The Public Trustee works with the Office of the Public Advocate (OPA) when there are mutual customers i.e. OPA as guardian and the Public Trustee as financial administrator.
The agency’s performance
Performance at a glance
During 2018-19 the Public Trustee continued to provide financial and administrative services to the people of South Australia. The following tables reflect outcomes and performance on each of the services in addition to achievements against the Public Trustee Strategic Plan.
Agency contribution to whole of Government objectives
| Key Objective | Agency’s contribution |
| Better Services | Implemented new telephone technology and call management processes.
Exceeded all targets over CPI for long term customer investments. Improved the timeliness and efficiency of payment processes for customer accounts by using BPAY. Established metrics/dashboard of key activities to improve resource planning and service delivery. |
Agency specific objectives and performance
The following table provides an overview of what has been achieved.
| Key Objective | Agency’s achievements |
| People | Continued staff wellbeing program.
Introduced specialist roles/subject matter experts. Created a structured induction training program for customer service staff. Created and implemented a staff recognition program. |
| Continuous Business Improvement | Reviewed policies and procedures.
Introduced the “Great Ideas” program that allows staff to submit business improvement ideas. |
| Customer Experience | Developed performance reporting.
Restructured case management in Estate Services to assist in file sharing. Conducted annual customer satisfaction survey. |
| Governance & Financial Sustainability | Achieved Charter and Performance targets.
Worked with DPTI to explore feasibility of reducing the quantity of leased office accommodation floor space and commenced lease renewal negotiations with building owner. Reviewed delegations for operational effectiveness and risk. Community Service Obligation Framework approved by the government and implemented. Continued to address ICAC recommendations. |
Agency specific programs
| Agency Program – Writing Wills & Powers of Attorney
Will and Power of Attorney drafting services were provided for all South Australians who nominated the Public Trustee as their executor, attorney or substitute attorney. |
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| Activity Indicators | 2018-19 | 2017-18 | |
| New Wills | 538 | 640 | |
| Revised Wills | 1 012 | 956 | |
| New & revised Power of Attorney documents | 378 | 391 | |
| Visits to people in their homes or other facilities to prepare Wills | 103 | 232 | |
| Effectiveness/Efficiency Indicators | 2018-19 | 2017-18 | |
| Customer satisfaction rating out of 5 with Will making services | 4.74 | 4.82 | |
| Wills customers who would recommend the Public Trustee | 92% | 94% | |
| Agency Program – Litigation Guardian
The Public Trustee may be appointed by a Court to act as ‘Next friend’ for customers unable to conduct their own legal proceedings. |
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| Activity Indicators | 2018-19 | 2017-18 | |
| Appointed as litigation guardian – new customers | 30 | 34 | |
| Matters on hand at 30 June | 97 | 87 | |
| Effectiveness/Efficiency Indicators | |||
| Customer satisfaction data not collected due to small sample size | |||
| Agency Program – Deceased Estates & Trusts AdministrationThe Public Trustee acts as executor of an estate where named executor in the Will, or as administrator when a person dies intestate (without a Will).
The Public Trustee manages court-awarded trusts, trusts established by a Will and trusts under deed for minors, as well as perpetual charitable and scholarship trusts. |
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| Activity Indicators | 2018-19 | 2017-18 | |
| Administration of new estates | 518 | 653 | |
| Administration of new trusts | 128 | 125 | |
| Finalised deceased estates | 728 | 681 | |
| Finalised trusts | 204 | 175 | |
| Effectiveness/Efficiency Indicators | 2018-19 | 2017-18 | |
| Customer satisfaction rating out of 5 with deceased estate administration services | 3.68 | 3.74 | |
| Deceased estate administration customers who would recommend the Public Trustee | 51% | 56% | |
| Agency Program – Personal Financial Administration
The Public Trustee can be appointed legally responsible for making all, or some, of a person’s financial and legal decisions where that person has lost capacity to do so. |
||
| Activity Indicators | 2018-19 | 2017-18 |
| Appointed administrator or manager of financial and legal affairs – new customers | 467 | 468 |
| Active financial administrations as at 30 June | 4 552 | 4 414 |
| Effectiveness/Efficiency Indicators | 2018-19 | 2017-18 |
| Customer satisfaction rating out of 5 by customers and their representatives | 3.52 | 3.83 |
| Agency Program – Monitoring Private Financial Administrators and Managers
The Public Trustee is required annually to examine and report on activities of private financial administrators and managers appointed by SACAT and the courts. |
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| Activity Indicators | 2018-19 | 2017-18 | |
| Review of financial statements of private administrators, managers and executors | 2 010 | 1 828 | |
| Matters referred to SACAT for non-compliance with reporting requirements | 190 | 142 | |
| Information sessions held for newly appointed administrators to explain their responsibilities | 15 | 15 | |
| Effectiveness/Efficiency Indicators | 2018-19 | 2017-18 | |
| Feedback from information sessions | Excellent/very good | Excellent/very good | |
Employment opportunity programs
| Program name | Performance |
| Jobs4Youth | One employee commenced the Jobs4Youth Program at the Public Trustee in 2018-19. |
Agency performance management and development systems
| Performance management and development system | Performance |
| Performance Management is captured using the ELMO Performance Management System. Public Trustee aims for a compliance rate of 100% of all active staff having two Performance Reviews during the year. | 96% of active staff as at 30 June 2019 are recorded as having had at least one performance management review in 2018-19. |
Work health, safety and return to work programs
| Program name | Performance |
| Employee Assistance Program (EAP) | All staff have access to a confidential Employee Assistance Program, offering a counselling service to support and assist staff with both professional and personal issues. |
| AGD Health and Safety Committee | The Public Trustee has manager and employee representation on this committee, which provides a consultative forum to support and continuously improve work, health, safety and wellbeing systems and practices. |
| Work health and safety Inspections | As part of the commitment to the safety of employees, six-monthly inspections are conducted to identify any hazards or risks with corrective action taken as needed. |
| The Public Trustee Health & Safety Committee | During 2018-19 the Public Trustee established its own Health and Safety Committee (HSC) to provide a proactive consultative forum for continuous improvement to the Public Trustee (PT) work health, safety and injury management (WHS&IM) system. |
| The Public Trustee Staff Culture & Wellbeing Initiatives | Staff are encouraged to participate in a range of social and wellbeing initiatives. As part of this, the Public Trustee staff raise funds to give back to the community through specially selected local charities and organisations. |
Work health and safety and return to work performance statistics for the Public Trustee are included in the Attorney-General’s Department Annual Report.
Executive employment in the agency
| Executive classification | Number of executives |
| SAES1 | 2 |
| SAES2 | 1 |
Data for previous years is available at: https://data.sa.gov.au/data/organization/attorney-general-s-dept
The Office of the Commissioner for Public Sector Employment has a workforce information page that provides further information on the breakdown of executive gender, salary and tenure by agency.
Financial performance
Financial performance at a glance
The following is a brief summary of the overall financial position of the agency. The information is unaudited. Full audited financial statements for 2018-19 are attached to this report.
| Statement of Comprehensive Income | 2018-19 Actual $000s |
2018-19 Budget $000s |
Variation $000s |
2017-18 Actual $000s |
| Revenues | 30 985 | 28 991 | 1 994 | 24 804 |
| Expenses | 26 073 | 24 824 | (1 249) | 23 629 |
| Net result before distributions | 4 912 | 4 167 | 745 | 1 175 |
| Income tax equivalent | 1 474 | 1 251 | 223 | 352 |
| Net result after Income Tax Equivalents | 3 438 | 2 916 | 522 | 823 |
| Statement of Financial Position | 2018-19 Actual $000s |
2018-19 Budget $000s |
Variation $000s |
2017-18 Actual $000s |
| Current assets | 10 270 | 9 325 | 945 | 8 958 |
| Non-current assets | 24 343 | 24 201 | 142 | 23 913 |
| Total assets | 34 613 | 33 526 | 1 087 | 32 871 |
| Current liabilities | 5 141 | 4 923 | (218) | 4 040 |
| Non-current liabilities | 4 769 | 4 407 | (362) | 4 538 |
| Total liabilities | 9 910 | 9 330 | (580) | 8 578 |
| Net assets | 24 703 | 24 196 | 507 | 24 293 |
| Equity | 24 703 | 24 196 | 507 | 24 293 |
During 2018-19 an interim dividend was paid and a final dividend is payable in 2019-20. The total payment will be $3.438m (2017-18 total $699 000).
The Public Trustee’s net result before distributions was $4.912m in 2018-19. That was $745 000 above budget. The following items contributed to the favourable result:
Revenue was 6.9% ($1.994m) higher than budget. The favourable variance was attributable to investment revenue $830 000, sundry income $731 000, fees and charges revenue $287 000 and management fees $146 000.
Expenses were 5% ($1.249m) above budget. This higher expenditure was mainly due to long service leave from staff that have transferred from other government agencies and targeted voluntary separation packages. This was recovered from these government agencies (shown as additional sundry income). Other expenditure included the increase in Long Service Leave costs arising from accounting valuation changes that occurred across government and unbudgeted expenditure relating to the Wills reform.
Community Service Obligations
A Community Service Obligation framework was introduced on 1 July 2018. This framework is consistent with other government trading businesses. The Community Service Obligation framework directly funds the Public Trustee’s non-commercial services. These include:
Managing the Affairs of the Disadvantaged (Personal Estates)
Managing Small Trusts
Regulation of Private Administrators
Litigation Guardianship Matters
From 1 July 2019 the Community Service Obligation framework will be expanded to include Wills and Power of Attorney for concession holders. This is a result of the policy decision to no longer compete with private enterprise to offer Wills and Power of Attorney services for non-concession holders.
The Community Service Obligation payment to the Public Trustee was $4.315 million in 2018-19. It increases the Public Trustee’s profit which is fully repaid to government via dividends and tax equivalent payments.
Consultants disclosure
The following is a summary of external consultants that have been engaged by the agency, the nature of work undertaken, and the actual payments made for the work undertaken during the financial year.
Consultancies with a contract value below $10,000 each
| Consultancies | Purpose | Actual payment |
| All consultancies below $10,000 each – combined | Various | $ 3 300 |
Consultancies with a contract value above $10,000 each
| Consultancies | Purpose | Actual payment |
| KPMG Forensic Pty Ltd | Client Relationship Management Software Review | $ 55 000 |
| Ernst Young | Information Technology Network Consolidation Review | $ 33 000 |
| Tasman Resourcing | Human Resource Consulting | $ 28 124 |
| SS&C Solutions Pty Ltd | Asset Management Software Review | $ 21 544 |
| Total | $137 668 |
Data for previous years is available at: https://data.sa.gov.au/data/organization/attorney-general-s-dept
See also the Consolidated Financial Report of the Department of Treasury and Finance for total value of consultancy contracts across the South Australian Public Sector.
Contractors disclosure
The following is a summary of external contractors that have been engaged by the agency, the nature of work undertaken, and the actual payments made for work undertaken during the financial year.
Contractors with a contract value below $10,000
| Contractors | Purpose | Actual payment |
| All contractors below $10,000 each – combined | Various | $115 540 |
Contractors with a contract value above $10,000 each
| Contractors | Purpose | Actual payment |
| Deloitte Risk Advisory Pty Ltd | Taxation advice | $ 14 252 |
| Hays Specialist Recruitment Pty Ltd | Temp Staff Agency | $ 14 817 |
| Modis Staffing Pty Ltd | Temp Staff Agency | $ 24 371 |
| Fuji Xerox Business Force Pty Ltd | Mailing Services | $ 28 672 |
| KPMG | Accounting Advice | $ 16 913 |
| KPMG | Strategic Plan Review | $ 12 860 |
| Scan Conversion Services Pty Ltd | Scanning Services | $ 31 121 |
| Wavemaker Australia Pty Ltd | Advertising Services for metropolitan/regional Will making visits | $ 31 979 |
| Excel Recruitment | Temp Staff Agency | $ 44 640 |
| Randstad Pty Ltd | Temp Staff Agency | $ 78 488 |
| Careerlink People Solutions | Temp Staff Agency | $111 680 |
| Pricewaterhouse Coopers | Internal Audit and Risk Management Services | $260 278 |
| Total | $670 153 |
Data for previous years is available at: https://data.sa.gov.au/data/organization/attorney-general-s-dept
The details of South Australian Government-awarded contracts for goods, services, and works are displayed on the SA Tenders and Contracts website. View the agency list of contracts.
The website also provides details of across government contracts.
Other information
Under the Public Corporations Act 1993, a Charter must be prepared for a Public Corporation and agreed between the Attorney-General and the Treasurer.
The Charter describes the reporting and accountability requirements and outlines objectives for invested customer funds, financial and other performance targets. It also sets out the responsibilities and the expectations of both the Public Trustee and the Government. The Charter is reviewed annually.
Customer Investments
All investment options finished with positive returns, despite a volatile start to the financial year. Growth oriented strategies with a higher weighting to shares, property and infrastructure were the best performers.
In terms of market performance the Public Trustee’s more conservative investment style with a focus on value and quality led to some underperformance from benchmark over the last 12 months, due to a rally in high growth/speculative stocks within the market. The Public Trustee’s investment returns ranged from 1.92% for cash to 4.54% for growth, net of fees.
The Public Trustee’s investment strategies have outperformed their CPI targets over each of the suggested time horizons, as illustrated below:
Investment Performance versus CPI Objectives as at 30 June 2019
| Investment Strategy | CPI Objective | Investment Horizon | Target Return % pa | Actual Return % pa | Over (+)/ Under(-) |
Outperformance % pa |
| Capital Stable | CPI + 1.5% pa | 3 Years | 3.37% | 3.97% | + | 0.60% |
| Balanced | CPI + 3% pa | 5 Years | 4.63% | 5.92% | + | 1.29% |
| Growth | CPI + 3.5% pa | 7 Years | 5.43% | 9.54% | + | 4.11% |
| Equities | CPI + 4% pa | 10 Years | 6.14% | 10.58% | + | 4.44% |
During the financial year, the Public Trustee allocated additional funds towards unlisted property and appointed a new specialist global fixed interest manager. These new investments are expected to generate a reasonable level of income, at a time where cash rates are at record lows.
2018–19 Investment Strategies
2018–19 Standard Investment Strategies’ Performance
| Last 12 Months |
Last 3 Years (Annualised) |
Last 5 Years (Annualised) |
Last 7 Years (Annualised) |
Last 10 Years (Annualised) |
|
| Cash | 1.92% | 1.85% | 2.09% | 2.50% | 3.23% |
| Benchmark | 0.96% | 0.86% | 1.08% | 1.34% | 1.99% |
| Variance | 0.96% | 0.99% | 1.01% | 1.16% | 1.24% |
| Capital Stable | 3.10% | 3.97% | 4.04% | 5.12% | 5.44% |
| Benchmark | 5.55% | 4.19% | 4.07% | 4.89% | 5.29% |
| Variance | -2.45% | -0.22% | -0.03% | 0.23% | 0.15% |
| Balanced | 4.24% | 6.12% | 5.92% | 7.70% | 7.52% |
| Benchmark | 8.22% | 6.79% | 6.15% | 7.64% | 7.61% |
| Variance | -3.98% | -0.67% | -0.23% | 0.06% | -0.09% |
| Growth | 4.54% | 7.83% | 7.14% | 9.54% | 8.83% |
| Benchmark | 8.64% | 8.50% | 7.16% | 9.36% | 8.69% |
| Variance | -4.10% | -0.67% | -0.02% | 0.18% | 0.14% |
| Equities | 4.45% | 11.22% | 9.09% | 12.44% | 10.58% |
| Benchmark | 9.24% | 11.97% | 8.96% | 12.30% | 10.10% |
| Variance | -4.79% | -0.75% | 0.13% | 0.14% | 0.48% |
The cash objective is to provide customers a very low risk strategy designed to achieve a return comparable to the 90 day bank bill rate and provide the advantage of having funds available at 24 hour call for amounts of up to $1m.
2018–19 Asset Allocation
2018–19 Capital Stable Standard Investment Strategy
| Common Fund | Allocation (%) 2018-19 | Allocation (%) 2017-18 | ||||
| Neutral | Period End | $m | Neutral | Period End | $m | |
| Australian Shares | 10.0% | 9.9% | $13.25 | 10.0% | 10.5% | $13.13 |
| Overseas Shares | 8.0% | 7.9% | $10.52 | 8.0% | 8.1% | $10.19 |
| Property | 10.0% | 10.5% | $14.00 | 10.0% | 10.0% | $12.52 |
| Long Term Fixed Interest | 15.0% | 14.9% | $19.87 | 15.0% | 14.8% | $18.53 |
| Short Term Fixed Interest | 26.5% | 26.6% | $35.44 | 26.5% | 26.5% | $33.27 |
| Overseas Fixed Interest | 12.5% | 12.1% | $16.16 | 12.5% | 12.0% | $15.05 |
| Cash | 18.0% | 18.1% | $24.11 | 18.0% | 18.1% | $22.70 |
| TOTAL | 100.0% | 100.0% | $133.35 | 100.0% | 100.0% | $125.39 |
2018–19 Balanced Standard Investment Strategy
| Common Fund | Allocation (%) 2018-19 | Allocation (%) 2017-18 | ||||
| Neutral | Period End | $m | Neutral | Period End | $m | |
| Australian Shares | 19.0% | 18.8% | $48.58 | 19.0% | 19.8% | $46.81 |
| Overseas Shares | 16.0% | 15.8% | $40.65 | 16.0% | 16.2% | $38.28 |
| Property | 20.0% | 21.0% | $54.03 | 20.0% | 19.9% | $47.00 |
| Long Term Fixed Interest | 22.0% | 21.8% | $56.16 | 22.0% | 21.6% | $50.89 |
| Short Term Fixed Interest | 7.0% | 7.0% | $18.05 | 7.0% | 7.0% | $16.47 |
| Overseas Fixed Interest | 12.0% | 11.6% | $29.93 | 12.0% | 11.5% | $27.09 |
| Cash | 4.0% | 4.0% | $10.34 | 4.0% | 4.0% | $9.46 |
| TOTAL | 100.0% | 100.0% | $257.74 | 100.0% | 100.0% | $236.00 |
2018–19 Growth Standard Investment Strategy
| Common Fund | Allocation (%) 2018-19 | Allocation (%) 2017-18 | ||||
| Neutral | Period End | $m | Neutral | Period End | $m | |
| Australian Shares | 29.0% | 28.8% | $64.79 | 29.0% | 30.0% | $65.54 |
| Overseas Shares | 24.0% | 23.6% | $53.28 | 24.0% | 24.1% | $52.68 |
| Property | 20.0% | 20.9% | $47.19 | 20.0% | 19.7% | $43.10 |
| Long Term Fixed Interest | 12.5% | 12.4% | $27.86 | 12.5% | 12.1% | $26.51 |
| Short Term Fixed Interest | 4.5% | 4.5% | $10.14 | 4.5% | 4.4% | $9.71 |
| Overseas Fixed Interest | 6.0% | 5.8% | $13.06 | 6.0% | 5.7% | $12.41 |
| Cash | 4.0% | 4.0% | $9.03 | 4.0% | 4.0% | $8.67 |
| TOTAL | 100.0% | 100.0% | $225.35 | 100.0% | 100.0% | $218.62 |
2018–19 Equities Standard Investment Strategy
| Common Fund | Allocation (%) 2018-19 | Allocation (%) 2017-18 | ||||
| Neutral | Period End | $m | Neutral | Period End | $m | |
| Australian Shares | 55.0% | 55.2% | $46.86 | 55.0% | 55.7% | $45.52 |
| Overseas Shares | 45.0% | 44.8% | $38.07 | 45.0% | 44.3% | $36.16 |
| TOTAL | 100.0% | 100.0% | $84.93 | 100.0% | 100.0% | $81.68 |
Data for previous years is available at: https://data.sa.gov.au/data/organization/attorney-general-s-dept
Risk management
Risk and audit at a glance
The Public Trustee has an Audit and Risk Management Committee (ARMC) to provide independent assurance to the Public Trustee by overseeing and monitoring the risk and control frameworks, internal audit and external accountability requirements. The Committee is responsible for approving a rolling three-year Internal Audit Plan that is delivered by the Public Trustee’s (outsourced) internal auditors and is developed with regard to the Public Trustee’s operational and enterprise risk registers.
Fraud detected in the agency
| Category/nature of fraud | Number of instances |
| Suspected cheque tampering of the Public Trustee’s cheques issued to vendors on behalf of customers. | 3 |
NB: Fraud reported includes actual and reasonably suspected incidents of fraud.
The Public Trustee is undertaking a number of activities to reduce the ongoing risk of cheque tampering including reducing the number of cheques produced and implementing additional security around cheques that are generated. There was no financial loss as all cheques were stopped prior to them being honoured.
Strategies implemented to control and prevent fraud
The Public Trustee has in place a number of management systems, policies, controls, training and procedures directed at preventing, detecting and minimising the risk of fraud. The Public Trustee assesses the risk of fraud as part of its Risk Assessment Process, with identified risks reviewed at least annually. Fraud risk and control assessments are also conducted as part of the Public Trustee Internal Audit Plan.
During the year a review of compliance against the Fraud and Corruption Control Policy was undertaken. As part of this review the Public Trustee’s internal auditors developed a Fraud and Corruption Control framework for the Public Trustee to use when conducting future compliance assessments.
An extensive review of fraud risks was also conducted in 2017 as part of the Independent Commissioner against Corruption’s Evaluation of the Practices, Policies and Procedures of the Public Trustee. The Public Trustee has continued to implement reform as a result of this review throughout the year, with actions to address seventeen of the nineteen recommendations now complete.
Data for previous years is available at: https://data.sa.gov.au/data/organization/attorney-general-s-dept
Whistle-blowers disclosure
There were no occasions on which public interest information has been disclosed to a responsible officer of the agency under the Whistleblowers Protection Act 1993:
Data for previous years is available at: https://data.sa.gov.au/data/organization/attorney-general-s-dept
Reporting required under any other act or regulation
| Act or Regulation | Requirement |
| Public Trustee Act 1995 | Section 30
(3) The Public Trustee must include in the Public Trustee’s annual report to the Minister for each financial year— (a) the audited statement of accounts in respect of each common fund for that financial year; and (b) the Auditor-General’s report on those accounts; and (c) the following investor information in respect of each common fund: (i) the nature and amount or rate of any fee that the Public Trustee charges in respect of investment in the fund; and (ii) the class of investments in which the fund may be invested; and (iii) the extent (if any) to which a capital sum invested may be reduced to defray losses from investment of the fund; and (iv) the rights of an investor in the fund to withdraw all or part of the person’s investment in the fund and the period of notice (if any) that the investor is required to give the Public Trustee in respect of such withdrawal; and (v) the terms governing distribution of income and profit or loss of a capital nature attributable to each investment in the fund. |
Audited Statement of Accounts in respect of each Common Fund:
Refer to the Annual Financial Statements section of this report.
The Auditor-General’s Report upon the Statements of Account:
Refer to the Annual Financial Statements section of this report.
The nature and amount of any fee that the Public Trustee charges in respect of investment in the common funds:
Management Fee
A management fee is charged against money invested in each common fund at the rate of one-twelfth of 1.025% (inc. of GST) of the value of the fund as at the first business day of each month. Management fees attract GST at a reduced rate as there is an entitlement to claim a reduced input tax credit.
Goods and Services Tax
An investment in the Public Trustee’s common funds is classified as an input-taxed financial supply and no GST is charged on such supplies. Investments made in common funds and investor withdrawals from those funds are not subject to GST; nor are entry fees subject to GST.
If a supply is input-taxed, the supplier will not usually receive a tax credit for any GST incurred in connection with the supplier’s expenses.
For financial supplies, the supplier is able to claim a tax credit for three quarters of the liability incurred in respect of certain expenses (this is called a reduced input tax credit).
The majority of expenses incurred by the Public Trustee’s common funds, including the Public Trustee management fees, are eligible for the reduced input tax credit. The net impact of the GST on expenses incurred by the common funds is therefore approximately 2.5% rather than the full 10% rate.
Indirect Cost Ratios (formerly Management Expense Ratio)
The total funds management costs for common funds and standard investment strategies, as represented by Indirect Cost Ratios (ICR), are shown in the following table.
| Strategy | ICR 2018-19 | ICR 2017-18 |
| Cash | 1.09% | 1.09% |
| Capital Stable | 1.29% | 1.27% |
| Balanced | 1.46% | 1.42% |
| Growth
Equities |
1.55%
1.69% |
1.50%
1.60% |
| Common Fund | ICR 2018-19 | ICR 2017-18 |
| Cash | 1.09% | 1.09% |
| Long Term Fixed Interest | 1.08% | 1.08% |
| Short Term Fixed Interest | 1.09% | 1.09% |
| Overseas Fixed Interest | 1.30% | 1.31% |
| Australian Shares | 1.56% | 1.59% |
| Property | 1.73% | 1.71% |
| Overseas Shares | 1.85% | 1.62% |
Entry Fees
Investors pay the following fees when investing in common funds (note: no fees are charged on entry or exit from the Cash Common Fund):
For beneficiaries of estates administered by the Public Trustee, where there is a change of ownership of the assets and when funds would otherwise be distributed:
| Amounts up to $500 000 | 0.5% |
| Additional amounts from $500 000 to $2 million | 0.375% |
| Additional amounts from $2 million to $5 million | 0.25% |
| Additional amounts above $5 million | 0.0% |
For beneficiaries of estates administered by the Public Trustee where there is no change of ownership of the assets and when funds would otherwise be distributed no entry fee will apply except to additional funds invested, in which case the above scale for the beneficiary investors will apply.
For all other investors:
| Amounts up to $500 000 | 1.0% |
| Additional amounts from $500 000 to $2 million | 0.75% |
| Additional amounts from $2 million to $5 million | 0.5% |
| Additional amounts above $5 million | 0.0% |
The above fees will also apply to distributed income and realised capital gains when they are reinvested in a strategy other than cash.
Exit Fees
No exit fees are charged.
Switching Fees
No switching fees will be charged except when moving monies from the cash investment strategy to another investment strategy. The entry fees as disclosed above will then apply.
Deposits
The Public Trustee does not accept cash deposits. Investments in strategies may be made either by cheque, direct credit or by transfer of funds from an existing estate being administered by the Public Trustee.
The extent to which a capital sum invested may be reduced to defray losses from investment of a common fund:
Realised or unrealised losses of a capital nature of an investment of a common fund shall be received or borne by investors, in proportion to the capital sums invested in the fund.
Rights of an investor in a common fund to withdraw all or part of a person’s investment in the fund:
Investors may withdraw all or part of their investment in a fund at any time.
Partial withdrawals must be in amounts of $1 000 or greater, or the balance of the funds being managed.
Cash Common Fund
Proceeds of withdrawals from the Cash Common Fund of amounts less than $1 million will be available on the next business day (subject to the request being received by 12 noon). Proceeds of withdrawals of amounts greater than $1 million may not be available for 30 business days.
Other Investment Strategies
Proceeds of withdrawals from investment strategies, other than the cash investment strategy fund of amounts less than $1 million, will not be available until 15 business days after the next exit day (currently the first day of each month). Proceeds of withdrawals of amounts greater than $1 million from these investment strategies may not be available until 30 business days after the next exit day.
Terms governing distribution of income and profit or loss of a capital nature attributable to each investment in a common fund:
The net income and realised capital gains of each fund are calculated to 30 June and 31 December and will be distributed to the investor in July and January of each year, unless the investor has given instructions to reinvest the money.
Classes of investment in which common funds may invest:
Section 29 of the Public Trustee Act 1995 requires the Public Trustee to determine the classes of investments in which a common fund may be invested, and provides for these classes to be varied from time to time. The Act does not define classes of investment.
Determination of the classes of investment in which the Public Trustee common funds may invest:
Cash Common Fund
The permitted classes of investment are:
a. Cash
b. Australian Fixed Interest
Qualifications on these investment classes:
i. All investments shall be denominated in Australian dollars.
ii. Fixed rate securities shall not exceed three years to maturity.
iii. Floating rate securities shall not exceed 10 years to maturity.
The following class of investment is explicitly excluded:
iv. Derivatives.
The permitted classes of investment are:
Short Term Fixed Interest Common Fund
a. Cash
b. Australian Fixed Interest
Qualifications on these investment classes:
i. All investments shall be denominated in Australian dollars. The fund’s liquidity requirements will be managed by an investment in the Cash Common Fund.
ii. Fixed rate securities shall not exceed five years to maturity.
iii. Floating rate securities shall not exceed 10 years to maturity.
iv. Security lending arrangements in relation to authorised investments are permitted.
The following class of investment is explicitly excluded:
v. Derivatives.
The permitted classes of investment are:
Long Term Fixed Interest Common Fund
a. Cash
b. Australian Fixed Interest
c. Inflation-linked Securities
Qualifications on these investment classes:
i. All investments shall be denominated in Australian dollars.
ii. The fund’s liquidity requirements will be met by investment in the Cash Common Fund.
iii. Fixed rate securities and inflation-linked securities shall not exceed 15 years and 25 years to maturity, respectively.
iv. Inflation-linked securities shall be restricted to consumer inflation or average weekly earnings-linked securities issued by the Commonwealth Government, State Governments or the Government of the Northern Territory, and securities issued by other parties where the payments to holders of the securities are guaranteed by these governments.
v. Security lending arrangements in relation to authorised investments are permitted.
The following class of investment is explicitly excluded:
vi. Derivatives.
The classes of investment are:
Australian Shares Common Fund
a. Cash
b. Australian Equities
c. Derivatives
Qualifications on these investment classes:
i. Fund liquidity requirements shall be met by investment in the Cash Common Fund.
ii. Investments in Australian Equities shall be limited to securities of companies and trusts listed on the Australian Stock Exchange, and to unlisted securities in companies and trusts where the intention is for these securities to be listed within six months of investment.
iii. Small capitalisation companies, defined as those outside the Top 100 Sector of the Australian Stock Exchange’s All Ordinaries Index, shall not exceed 20% of the fund’s assets.
iv. Underwriting is permitted only where the Public Trustee has made a firm subscription to a new issue and the amount underwritten does not exceed the subscription amount.
v. Underwriting as an investment instrument is prohibited.
vi. Security lending arrangements in relation to authorised investments is permitted.
vii. Investments in financial derivatives specifically relating to the investments of the fund are permitted for the purpose of:
- investment of funds; or
- hedging or otherwise managing the risk of the fund.
Property Common Fund
The classes of investment are:
a. Cash
b. Property
c. Infrastructure
Qualifications on these investment classes:
i. Fund liquidity requirements shall be met by investment in the Cash Common Fund.
ii. Investments in property comprise securities of companies and trusts that are either listed or unlisted.
iii. Investments in listed and unlisted infrastructure trusts are permitted in the fund.
iv. Underwriting is permitted only where the Public Trustee has made a firm subscription to a new issue and the amount underwritten does not exceed the subscription amount.
v. Security lending arrangements in relation to authorised investments are permitted.
vi. Investments in financial derivatives specifically relating to the investments of the fund are permitted for the purpose of:
- investment of funds; or
- hedging or otherwise managing the risk of the fund.
Overseas Shares Common Fund
The classes of investment are:
a. Cash
b. International Equities
c. Derivatives
Qualifications on these investment classes:
i. Fund liquidity requirements shall be met by investment in the Cash Common Fund.
ii. Cash, where held other than by investment in the Cash Common Fund, shall be held as bank deposits, bank-guaranteed securities or short term sovereign debt instruments.
iii. Trading in inter-bank or over-the-counter markets shall occur only in those markets which have been approved by the relevant government agencies of the country in which the market is conducted.
iv. Investments in collective investment schemes, the primary mandates of which are the holdings of smaller companies and emerging markets securities, shall not exceed 25% and 15% of the assets of this common fund, respectively.
v. Underwriting is permitted only where the Public Trustee (either directly or via an appointed custodian) has made a firm subscription to a new issue and the amount underwritten does not exceed the subscription amount.
vi. Security lending arrangements in relation to authorised investments are permitted.
The permitted classes of investment are:
Overseas Fixed Interest Common Fund
a. Cash
b. International Fixed Interest and inflation linked securities
c. Derivatives
Qualifications on these investment classes:
i. The fund’s liquidity requirements shall be met by investment in the Cash Common Fund.
ii. Cash, where held other than by investment in the Cash Common Fund, shall be held as bank deposits, bank-guaranteed securities or short term sovereign debt instruments.
iii. All fixed income securities must be rated by recognised rating agencies and at least 90% of the fund shall comprise investment-grade securities.
iv. Investments in financial derivatives specifically relating to the investments of the fund are permitted for the purpose of:
- investment of funds; or
- hedging or otherwise managing the risk of the fund.
Public complaints
For all classes of investment the fund may invest in collective investment schemes operated by organisations approved by the relevant government agencies, provided that the rules of the collective investment schemes restrict the schemes’ investments to the permitted classes of investment of the common fund.
Number of public complaints reported
| Complaint categories | Sub-categories | Example | Number of Complaints |
| Professional behaviour | Staff competency | Failure to action service request; poorly informed decisions; incorrect or incomplete service provided | 17 |
| Communication | Communication quality | Inadequate, delayed or absent communication with customer | 18 |
| Service delivery | Process | Processing error; incorrect process used; delay in processing application; process not customer responsive | 2 |
| Policy | Policy application | Incorrect policy interpretation; incorrect policy applied; conflicting policy advice given | 2 |
| Service quality | Timeliness | Lack of staff punctuality; excessive waiting times (outside of service standard); timelines not met | 2
|
| No case to answer | No case to answer | Third party; customer misunderstanding; redirected to another agency; insufficient information to investigate | 55 |
| Total | 96 |
During 2018-19 the Public Trustee reviewed its complaint monitoring process to provide additional detail and an assessment of the type of complaints. As a result there is no comparison data available for 2017-18.
| Additional Metrics | Total |
| Number of positive feedback comments | 37 |
| Number of negative feedback comments | 96 |
| Total number of feedback comments | 133 |
| % complaints resolved within policy timeframes | 58% |
Data for previous years is available at: https://data.sa.gov.au/data/organization/attorney-general-s-dept
Appendix 1: The Public Trustee Services 2018-19
| 2018-19 | 2017-18 | |
| Documents prepared (including during home visits) | ||
| New Wills | 538 | 640 |
| Revised Wills | 1 012 | 956 |
| Total Wills | 1 550 | 1 596 |
| Enduring Powers of Attorney (new and revised) | 378 | 391 |
| Documents prepared during home visits | ||
| Number of home visits | 103 | 232 |
| Wills (new and revised) | 93 | 102 |
| Enduring Powers of Attorney (new and revised) | 11 | 28 |
| Deceased estate administration | ||
| New cases | 518 | 653 |
| Completed estate matters | 728 | 681 |
| Estates currently under administration | 1 014 | 1 172 |
| Grants of probate and administration received for the period | 427 | 428 |
| Unclaimed money balances – finalised at 30 June, payment early next period | ||
| Number of unclaimed balances paid to DTF | 39 | 44 |
| Value of unclaimed balances paid to DTF | $0.6m | $0.3m |
| Annual taxation returns | ||
| Taxation returns and other assessments completed | 7 195 | 7 410 |
| Personal estate administration | ||
| Total number of personal estates under administration (including SACAT orders, court awards and Powers of Attorney) | 4 552 | 4 414 |
| Number of new customers under SACAT Orders | 402 | 403 |
| New court award customers | 29 | 29 |
| Total funds received from new court awards | $4.5m | $10.6m |
| New Power of Attorney customers | 36 | 36 |
| Number of in-person meetings with Personal Estates Branch customers | 872 | 811 |
| Court awarded funds under administration (includes court award customers and court award trusts) | $439.2m | $436.5m |
| Reduced fee threshold | $5 050 | $4 950 |
| % of customers under administration from whom no fees were collected | 17.6% | 15% |
| Trust activity | ||
| New trusts | 128 | 125 |
| Trust matters finalised | 200 | 175 |
| Trusts on hand at 30 June | 1 244 | 1 316 |
| Trusts for children under the care of the Minister | ||
| Trusts for children under the care of the Minister for Child Protection on hand at 30 June | 33 | 33 |
| Completed trusts for children under the care of the Minister for Child Protection | 3 | 7 |
| Litigation guardian appointments | ||
| Number of next friend/litigation guardian matters on hand | 97 | 87 |
| New litigation guardian customers | 30 | 34 |
| Private administrators and private managers – review of financial statements | ||
| Private administrators appointed under the Guardianship and Administration Act 1993 | 1 524 | 1 384 |
| Private managers appointed under the Aged and Infirm Persons’ Property Act 1940 | 179 | 168 |
| Matters referred to SACAT for non – compliance | 190 | 142 |
| Information sessions for newly appointed administrators | 15 | 15 |
| Alternate executor administrations pursuant to a court order | 307 | 276 |
| Customer financial services activity | ||
| Funds under administration (including superannuation) | $1 230.0m | $1 179.1m |
| New funds invested for the reporting period | $89.1m | $79.1m |
| Funds redeemed for the reporting period | $44.1m | $49.3m |
| Total Common Fund trades for the reporting period | $1 473.5m | $1 056.8m |
| Distributions to customers | $32.8m | $44.0m |
| Total number of payments made | 425 068 | 417 896 |
| Total value of payments made | $282.1m | $290.6m |
| Total customer funds receipted value of pensions included |
$338.6m
$76.9m |
$281.7m
$81.3m |
| Total value of real estate properties held | $360.9m | $357.8m |
| Total value of managed customer assets | $1 666.6m | $1 659.5m |
Data for previous years is available at: https://data.sa.gov.au/data/organization/attorney-general-s-dept
Appendix 2: Audited financial statements 2018-19
The full 2018-19 The Public Trustee Annual Report can be found here.