Home / 2019-20 Public Trustee Annual Report

2019-20 Public Trustee Annual Report

 

THE PUBLIC TRUSTEE

2019-20 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: 24 September 2020

 

To The Honourable Vickie Chapman MP

Deputy Premier

Attorney-General

Minister for Planning and Local Government

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
Public Trustee
24 September 2020

 

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.

The Public Trustee Strategic Plan for 2019-2021 outlines that 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 2019-20 the Public Trustee completed all recommendations of the Independent Commissioner Against Corruption’s (ICAC) Evaluation of the Practices, Policies and Procedures. This included streamlining policies and procedures, increased training of staff, improved staff communication as well as ensuring robust procurement processes and a plan to progressively update legacy systems over time. To ensure the recommendations were implemented and embedded in the business, PWC conducted an internal audit as part of the Public Trustee’s 2019-20 Internal Audit Plan and confirmed that all items were finalised by the end of November 2019.

There were a number of changes to the Public Trustee services which were implemented in 2019-20. These included 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 returned the Public Trustee back to its core business as a trustee, executor and administrator.

The operations of the Public Trustee have been improved in 2019-20 by:

  • Taking an incremental approach to modernising the existing electronic systems. As part of this approach, the Public Trustee enhanced telephone call and management recording. The system has continued to be enhanced over time and forms part of staff coaching and training.
  • Strengthening investment governance with the appointment of two additional external Investment Committee members.
  • Enhancing existing dashboards that monitor performance against service standards and key areas of service provision to improve the customer experience.
  • Strengthening the staff and manager training regime, improving staff consultation and making organisational changes to improve workforce capacity and capability.
  • Holding the second annual staff recognition event in November.

The Customer Satisfaction Survey for 2019-20 has confirmed an improved level of satisfaction compared to the prior year in all areas of customer service provision.

The COVID-19 crisis resulted in a number of major changes to business operations during the period including:

  • Experiencing a significant increase of in-bound calls, receipting and payments to suppliers and clients, as a result of payments to customers under the Commonwealth Government’s economic stimulus package.
    • 3,241 Commonwealth Government payments to support households (each of $750), totalling $2.43 million were receipted to customer accounts.
  • Undertaking extensive work to expand our ICT capability with increased server capacity for remote users.
  • Transitioning to working from home arrangements and the change in processes that have been involved to accommodate at least 50% of staff working from home.
  • Ensuring employee wellbeing was central to our planning including enhanced weekly communications.
  • Creating a ‘smiley face survey’ wellbeing initiative, a brief, two minute email survey in which employees are asked “How do you feel today?”, using smiley face icons to indicate their reply – a free text section provides opportunity for further context to be shared by the employee.

The Public Trustee’s profit for 2019-20 was $5.648 million.

The 2019-20 financial year was an extremely volatile period for financial markets. After a particularly challenging March period, markets partially recovered in the June quarter.

For the financial year, global shares and fixed interest were the best performers, finishing with positive returns, whilst Australian shares, listed real estate and most other asset classes finished down. The Public Trustee’s investment returns ranged from 1.03% for Cash to -2.48% for Equities, net of fees. Ten year returns ranged from 2.90% p.a. for Cash to 9.26% p.a. for Equities, net of fees.

Nicolle Rantanen
Public Trustee

 

 

Contents

Contents

Overview: about the agency

Our strategic focus

Our organisational structure

Changes to the agency

Our Minister

Our Executive team

Legislation administered by the agency

Other related agencies

The agency’s performance

Performance at a glance

Agency contribution to whole of Government objectives

Work health, safety and return to work programs

Executive employment in the agency

Financial performance

Financial performance at a glance

Consultants disclosure

Contractors disclosure

Other information

Risk management

Risk and audit at a glance

Fraud detected in the agency

Strategies implemented to control and prevent fraud

Public interest disclosure

Reporting required under any other act or regulation

Number of public complaints reported

Appendix 1: The Public Trustee Services 2019-20

Appendix 2: Audited financial statements 2019-20

 

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

•   Provide friendly, timely, knowledgeable and accurate information to customers.
•   Explain things in an easy to understand and jargon-free way.
•   Show empathy and put yourself in the customers’ shoes.

Professionalism

Strive for excellence

•    Provide relevant and timely responses to requests.
•    Follow through on priorities, and care about your work.
•   Encourage ongoing learning to maintain and update knowledge.

Trust

We have confidence in the ability of others

•   Trust the team to do the right thing.
•   Empower and encourage others to participate in decision making.

Respect

We value every individual

•   Be polite, listen to opinions, and provide feedback.
•   Treat everyone with dignity.

Collaboration and Engagement

We create solutions together

•   Consult, genuinely listen to and consider people’s views.
•   Work together to solve problems.

Honesty and Integrity

We act truthfully, consistently, and fairly

•   Act ethically and manage risks appropriately.
•   Provide honest feedback.

Courage and Tenacity

We never give up

•    Be brave and put forward ideas.
•    Challenge accepted norms.

Sustainability

We work to get the best results for current and future generations of South Australians

•   Value our customers and staff.
•   Think broadly to increase efficiency.

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 2019-20 the following changes occurred to the agency’s structure and objectives.

These changes to services took effect from 1 July 2019.

Will & Enduring Power of Attorney Eligible Customers

Will making and Enduring Power of Attorney services were previously available to all South Australians. From 1 July 2019, these services were 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:
    • Jobseeker (formerly known as 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 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)).

Until 30 June 2019 that approval included the following classes of people:

    1. Wills customers of the Public Trustee
    2. Beneficiaries of estates and trusts administered by the Public Trustee, when funds would otherwise be distributed
    3. Trustees of estates and trusts
    4. Trustees of charitable funds
    5. Trusts of Self-Managed Superannuation Funds
    6. Staff of the Public Trustee

The government does not consider that investing funds, other than as part of its role in administering customer money, is the core business of the Public Trustee.

On 1 July 2019 the Public Trustee ceased accepting any new deposits from the six classes listed above, with the service to be fully phased out by 30 June 2021. This will enable the existing clients sufficient time to seek the necessary accounting and taxation advice and arrange for an alternative investment provider. There were 227 investors when the changes were announced. That reduced to 144 investors at 30 June 2020.   

Last year’s annual report noted the intention of the government to merge the Public Trustee and the Office of the Public Advocate, subject to the passage of legislation. This legislation was not passed by the Parliament and this merger did not proceed.

 

 Our Minister

The Hon Vickie Chapman MP, Deputy Premier, Attorney-General and Minister for Planning and Local Government 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

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, as manager of estates of protected persons 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, procurement and risk management. The role is also responsible for financial services for customers including financial management and reporting, accounts payable and receivable, investment funds management 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; and
  • 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 2019-20 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
  • Exceeded CPI targets over the medium to long term for customer investments.
  • Improved the timeliness and efficiency of payment processes for customer accounts by using BPAY.
  • Consolidated two shop fronts into one refurbished modern and secure shop, designed to cater for the needs of all Public Trustee customers.
  • Used modified new service delivery model within Personal Estates to triage customer enquiries, prioritise and manage timely responses to adapt to the COVID-19 environment.

Agency specific objectives and performance

The following table provides an overview of what has been achieved.

Key Objective Agency’s achievements
People
  • Continued the staff wellbeing program.
  • Continued the staff recognition program.
  • Initiated weekly workforce planning meetings to apply resources to address priorities.
  • Created a structured leadership program tailored to Public Trustee Leaders.
  • Continued to focus on employee engagement via pulse surveys.
  • Created an ‘Experience Your Role’ Initiative that allows executive first-hand experience of operational roles.
  • Continued inter-branch forums to exchange information and discuss ideas.
Continuous Business Improvement
  • Continued the ongoing review of policies.
  • Developed a real estate tracking system to provide oversight of the status and progress of property sales.
  • Introduced product/procedural training forums for staff.
  • Prepared Will and Powers of Attorney via phone appointments with the postal exchange of documents.
  • Developed a plan to transition from the existing PeopleSoft CRM system to a new CRM system.
Customer Experience
  • Conducted 2019-20 annual customer satisfaction survey.
  • Initiated the Customer Experience Committee to improve interactions with customers.
Governance & Financial Sustainability
  • Achieved Charter and Performance targets.
  • Addressed all ICAC recommendations.
  • Successfully worked with DPTI to increase the efficiency of floor space utilisation and improve customer service facilities on the ground floor of 211 Victoria Square Adelaide.
  • Reviewed delegations for operational effectiveness.

 Agency specific programs

Agency Program – Writing Wills & Powers of Attorney

Will and Power of Attorney drafting services were provided for all eligible South Australians who nominated the Public Trustee as their executor, attorney or substitute attorney.

Activity Indicators 2019-20 2018-19
•  New Wills 270 538
•  Revised Wills 700 1 012
•  New & revised Power of Attorney documents 163 378
Effectiveness/Efficiency Indicators 2019-20 2018-19
•  Customer satisfaction rating out of 5 with Will making services 4.80 4.74
•  Wills customers who would recommend the Public Trustee 94% 92%

*Note: Lower new and revised Wills numbers are representative of new eligibility requirements introduced 1 July 2020. The numbers include processing of bookings made prior to the changes and honoured through until 30 September 2020.

Agency Program – Deceased Estates & Trusts Administration

The 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.

Activity Indicators 2019-20 2018-19
•  Administration of new estates 470 518
•  Administration of new trusts 134 128
•  Finalised deceased estates 573 728
•  Finalised trusts 180 204
Effectiveness/Efficiency Indicators                  2019-20 2018-19
•  Customer satisfaction rating out of 5 with deceased estate administration services 3.76 3.68
•  Deceased estate administration customers who would recommend the Public Trustee 57% 51%
•  Customer satisfaction rating out of 5 with trust administration services 3.92 3.33

 

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.

Activity Indicators              2019-20 2018-19
• Appointed administrator or manager of financial and legal affairs – new customers 466 467
•  Active financial administrations as at 30 June 4 621 4 552
Effectiveness/Efficiency Indicators                  2019-20 2018-19
•  Customer satisfaction rating out of 5 by customers and their representatives 3.63 3.52

 

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.

Activity Indicators              2019-20 2018-19
• Review of financial statements of private administrators, managers and executors 2 353 2 010
• Matters referred to SACAT for non-compliance with reporting requirements 274 190
• Information sessions held for newly appointed administrators to explain their responsibilities 10 15
Effectiveness/Efficiency Indicators                  2019-20 2018-19
• Feedback from information sessions Excellent/very good Excellent/very good

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.

Activity Indicators              2019-20 2018-19
•      Appointed as litigation guardian – new customers 36 30
•      Matters on hand at 30 June 94 97
Effectiveness/Efficiency Indicators                             
•      Customer satisfaction data not collected due to small sample size

 

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 Performance Reviews during the year. *91.4% of all staff as at 30 June 2020 are recorded as having had at least one performance management review in 2019-20.

*This figure reflects all staff, excluding those on long term paid leave who may not have had a performance review in the 6-12 month period.

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 The Public Trustee Health and Safety Committee provides a proactive consultative forum for continuous improvement to Public Trustee work health, safety and injury management.
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 2019-20 are attached to this report.

Statement of Comprehensive Income

2019-20
Actual
$000

2019-20
Budget
$000
Variation
$000

2018-19 Actual
$000

Revenue 32 208 30 777 1 431 30 985
Expenses 26 560 24 689 (1 871) 26 073
Net result before distributions 5 648 6 088 (440) 4 912
Income tax equivalent 1 694 1 826 (132)   1 474
Net result after Income Tax Equivalents 3 954 4 262 (308) 3 438

 

Statement of Financial Position

2019-20 Actual
$000

2019-20 Budget
$000
Variation
$000

2018-19 Actual
$000

Current assets 13 244 10 400      2 844 10 270
Non-current assets 34 241 39 366 (5 125) 24 343
Total assets 47 485 49 766 (2 281) 34 613
Current liabilities 5 803 5 315      488   5 141
Non-current liabilities 18 269 19 749      (1 480) 4 769
Total liabilities 24 072 25 064 (992)       9 910
Net assets 23 413 24 702 (1 289) 24 703
Equity 23 413 24 702 (1 289) 24 703

During 2019-20 an interim dividend was paid and a final dividend is payable in 2020-21. The total payment will be $3.954 million (2018-19 total $3.438 million).

The Public Trustee’s net result before distributions was $5.648 million in 2019-20. That was $0.440 million below budget. The following items contributed to the unfavourable result:

Expenses were 7.5% ($1.871 million) above budget. This is mainly due to unrealised losses on investments ($1.518 million) and additional unavoidable expenditure to sustain operations as a result of the COVID-19 global pandemic ($300,000).

Revenue was 4.6% ($1.431 million) above budget. The favourable variance was attributable to a depreciation write back $2.464 million, gain on lease modification $0.532 million and sundry income $0.157 million. This was partially offset by unfavourable fees and charges revenue ($1.504 million) and investment revenue ($0.218 million).  Investment revenue and fees and charges revenue were impacted by the COVID-19 global pandemic.

The variations to budget in the Statement of Financial Position are primarily related to the Accounting treatment for the Public Trustee’s accommodation lease which changed on 1 July 2019 as a result of the new AASB16 Lease standard. The accommodation lease is reflected in the Statement of Financial Position for the first time as a lease asset with an associated lease liability. The lease asset is depreciated over the life of the lease term and the lease liability is reduced with lease payments over the life of the lease term.

  

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 N/A $ 0

Consultancies with a contract value above $10,000 each

Consultancies Purpose Actual payment
Nil N/A $ 0
  Total $ 0

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 $78,561

 Contractors with a contract value above $10,000 each

Contractors Purpose Actual payment
Jtwo Solutions Pty Ltd Office 365 Planning $13,200
Rosslyn Cox and Mark Williams Management Training $14,575
Scan Conversion Services Pty Ltd Scanning Services $19,550
Harrison McMillan Pty Ltd Temporary Staff $21,938
Hays Specialist Recruitment Pty Ltd Temporary Staff $27,395
The Information Management Group Scanning Services $33,198
Excel Recruitment Temporary Staff $37,195
T & P Removals Pty Ltd Removalist Services $40,746
Chamonix IT Management Consulting Information Technology – SharePoint Upgrade $49,500
Deloitte Risk Advisory Pty Ltd Internal Audit and Risk Management Services $61,373
Careerlink People Solutions Temporary Staff $59,927
SS&C Solutions Pty Ltd Information Technology upgrades – Customer Asset Management system $84,998
Ernst Young Customer Investment Management System $80,150
Pricewaterhouse Coopers Internal Audit and Risk Management Services $123,535
Randstad Pty Ltd Temporary Staff $165,345
Total $832,625

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

The Public Trustee’s Growth and Equities investment strategies outperformed their target returns. The Capital Stable and Balanced investment strategies underperformed their targets due to the COVID-19 pandemic impact on strategies with a short term investment horizon.

Investment Performance versus CPI Objectives as at 30 June 2020

Investment Strategy CPI Objective Investment Horizon Target Return % pa Actual Return % pa Over (+)/

Under(-)

Over/Under performance

% pa

Capital Stable CPI + 1.5% pa 3 Years 2.60% 2.45% -0.15%
Balanced CPI + 3% pa 5 Years 4.25% 4.18% -0.07%
Growth CPI + 3.5% pa 7 Years 5.04% 6.71% + 1.67%
Equities CPI + 4% pa 10 Years 5.79% 9.26% + 3.47%

2019–20 Investment Strategies

2019–20 Standard Investment Strategies’ Performance

Last
12 Months
Last
3 Years
(Annualised)
Last
5 Years
(Annualised)
Last
7 Years
(Annualised)
Last
10 Years
(Annualised)
Cash 1.03% 1.58% 1.75% 2.08% 2.90%
Benchmark -0.16% 0.53% 0.73% 0.99% 1.68%
Variance 1.19% 1.05% 1.02% 1.09% 1.22%
 
Capital Stable -0.02% 2.45% 3.03% 3.96% 4.79%
Benchmark 0.21% 3.16% 3.21% 3.91% 4.56%
Variance -0.23% -0.71% -0.18% 0.05% 0.23%
 
Balanced -1.51% 3.21% 4.18% 5.61% 6.54%
Benchmark -1.54% 4.25% 4.42% 5.69% 6.41%
Variance 0.03% -1.04% -0.24% -0.08% 0.13%
 
Growth -2.27% 3.75% 4.93% 6.71% 7.67%
Benchmark -2.40% 4.72% 5.00% 6.64% 7.33%
Variance 0.13% -0.97% -0.07% 0.07% 0.34%
 
Equities -2.48% 4.99% 6.31% 8.61% 9.26%
Benchmark -3.79% 5.67% 6.06% 8.34% 8.67%
Variance 1.31% -0.68% 0.25% 0.27% 0.59%

2019–20 Asset Allocation

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.

2019–20 Capital Stable Standard Investment Strategy

Common Fund Allocation (%) 2019-20 Allocation (%) 2018-19
Neutral Period End $m Neutral Period End $m
Australian Shares 10.0% 9.4% 12.77 10.0% 9.9% 13.25
Overseas Shares 8.0% 7.7% 10.39 8.0% 7.9% 10.52
Property 10.0% 9.8% 13.21 10.0% 10.5% 14.00
Long Term Fixed Interest 15.0% 15.3% 20.63 15.0% 14.9% 19.87
Short Term Fixed Interest 26.5% 27.3% 36.88 26.5% 26.6% 35.44
Overseas Fixed Interest 12.5% 12.2% 16.42 12.5% 12.1% 16.16
Cash 18.0% 18.3% 24.81 18.0% 18.1% 24.11
TOTAL 100.0% 100.0% 135.11 100.0% 100.0% 133.35

2019–20 Balanced Standard Investment Strategy 

Common Fund Allocation (%) 2019-20 Allocation (%) 2018-19
Neutral Period End $m Neutral Period End $m
Australian Shares 20.5% 18.3% 45.81 19.0% 18.8% 48.58
Overseas Shares 12.0% 15.7% 39.26 16.0% 15.8% 40.65
Property 22.5% 19.9% 49.94 20.0% 21.0% 54.03
Long Term Fixed Interest 19.0% 22.8% 57.06 22.0% 21.8% 56.16
Short Term Fixed Interest 7.0% 7.3% 18.38 7.0% 7.0% 18.05
Overseas Fixed Interest 15.0% 11.9% 29.76 12.0% 11.6% 29.93
Cash 4.0% 4.1% 10.41 4.0% 4.0% 10.34
TOTAL 100.0% 100.0% 250.62 100.0% 100.0% 257.74

2019–20 Growth Standard Investment Strategy

Common Fund Allocation (%) 2019-20 Allocation (%) 2018-19
Neutral Period End $m Neutral Period End $m
Australian Shares 29.0% 28.2% 61.62 29.0% 28.8% 64.79
Overseas Shares 24.0% 23.7% 51.90 24.0% 23.6% 53.28
Property 20.0% 20.1% 44.00 20.0% 20.9% 47.19
Long Term Fixed Interest 12.5% 13.1% 28.56 12.5% 12.4% 27.86
Short Term Fixed Interest 4.5% 4.8% 10.41 4.5% 4.5% 10.14
Overseas Fixed Interest 6.0% 6.0% 13.10 6.0% 5.8% 13.06
Cash 4.0% 4.1% 9.17 4.0% 4.0% 9.03
TOTAL 100.0% 100.0% 218.76 100.0% 100.0% 225.35

2019–20 Equities Standard Investment Strategy

Common Fund Allocation (%) 2019-20 Allocation (%) 2018-19
Neutral Period End $m Neutral Period End $m
Australian Shares 55.0% 54.6% 44.36 55.0% 55.2% 46.86
Overseas Shares 45.0% 45.4% 36.93 45.0% 44.8% 38.07
TOTAL 100.0% 100.0% 81.29 100.0% 100.0% 84.93

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, (in addition to 3 similar incidents identified in 2018-19).

The incident was identified on 1 July 2019. The Public Trustee has implemented 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 the cheque was detected and stopped prior to being honoured.

1
Suspected fraud/international theft involving hacking of an overseas beneficiary email account.

The circumstances of the incident have been investigated by the Public Trustee’s internal auditors with recommendations made to strengthen relevant controls and compliance with the Public Trustee’s operating procedures.

1
Independent Commissioner Against Corruption (ICAC) allegation of Abuse of Public Office by a Public Trustee Estate Officer in the period 1 April 2004 to 11 October 2006. 1

NB: Fraud reported includes actual and reasonably suspected incidents of fraud.

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.

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 continued to implement the suggested changes as a result of this review, with all actions to address the nineteen recommendations complete by November 2019. The actions taken have been validated by the Public Trustee’s internal auditors who confirmed they were complete and met the relevant ICAC recommendation.

Data for previous years is available at: https://data.sa.gov.au/data/organization/attorney-general-s-dept

 

Public interest disclosure

There were no occasions on which public interest information has been disclosed to a responsible officer of the agency under the Public Interest Disclosure Act 2018.

Data for previous years is available at: https://data.sa.gov.au/data/organization/attorney-general-s-dept

Note: Disclosure of public interest information was previously reported under the Whistleblowers Protection Act 1993 and repealed by the Public Interest Disclosure Act 2018 on 1/7/2019.

 

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 2019-20 ICR 2018-19
Cash 1.09% 1.09%
Capital Stable 1.30% 1.29%
Balanced 1.46% 1.46%
Growth 1.54% 1.55%
Equities 1.65% 1.69%
Common Fund ICR 2019-20 ICR 2018-19
Cash 1.09% 1.09%
Long Term Fixed Interest 1.09% 1.08%
Short Term Fixed Interest 1.08% 1.09%
Overseas Fixed Interest 1.43% 1.30%
Australian Shares 1.53% 1.56%
Property 1.75% 1.73%
Overseas Shares 1.79% 1.85%

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.

Deposits

The Public Trustee manages the deposit of funds for our Trust and Personal Estate customers. Deposits are no longer accepted for Section 29(1)(b) customers.

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 are 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:

i. Derivatives

Short Term Fixed Interest 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. 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.

Security lending arrangements in relation to authorised investments are permitted.

The following class of investment is explicitly excluded:

i. Derivatives

Long Term Fixed Interest Common Fund

The permitted classes of investment are:

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.
iii. 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.
iv. Security lending arrangements in relation to authorised investments are permitted.

The following class of investment is explicitly excluded:

i. Derivatives

Australian Shares Common Fund

The classes of investment are:

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.
vii. Security lending arrangements in relation to authorised investments is permitted.
viii. 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.

Overseas Fixed Interest Common Fund

The permitted classes of investment are:

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.
  • 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 26
Communication Communication quality Inadequate, delayed or absent communication with customer 25
Service delivery Process Processing error; incorrect process used; delay in processing application; process not customer responsive 32
Policy Policy application Incorrect policy interpretation; incorrect policy applied; conflicting policy advice given 10
Service quality Timeliness Lack of staff punctuality; excessive waiting times (outside of service standard); timelines not met 17
No case to answer No case to answer Third party; customer misunderstanding; redirected to another agency; insufficient information to investigate 33
Total 143

 

Additional Metrics Total
Number of positive feedback comments 20
Number of negative feedback comments 143
Total number of feedback comments 163

In 2019 the Public Trustee reviewed and updated its complaints management procedures consistent with the Ombudsman SA 2018 Audit report and the Department of the Premier and Cabinet Circular 039 (Complaints Management in the South Australian Public Sector).

Additional training was provided to staff in recording, investigating and resolving complaints. The Public Trustee has increased the rigour around complaint investigation led by Branch Managers.

The Public Trustee recorded 143 complaints in 2019-20. A number of these complaints arose from the high number of telephone and email enquiries from customers seeking access to economic stimulus payments under Federal government COVID-19 support arrangements.

The average number of days to resolve a customer complaint was 8.7 (target 10 days).

Data for previous years is available at: https://data.sa.gov.au/data/organization/attorney-general-s-dept

Service Improvements resulting from complaints or consumer suggestions over 2019-20

The approach adopted to investigating complaints requires input from the Estate Officer, Team Leader and Branch Manager. Whilst the primary focus is on resolving the customer complaint, the process is also used to coach staff involved to avoid a reoccurrence.

Appendix 1: The Public Trustee Services 2019-20

2019-20 2018-19
Documents prepared  
New Wills 270 538
Revised Wills 700 1 012
Total Wills 970 1 550
Enduring Powers of Attorney (new and revised) 163 378
Deceased estate administration  
New estates 470 518
Completed estate matters 573 728
Estates currently under administration 1 011 1 014
Grants of probate and administration received for the period 349 427
Unclaimed money balances – finalised at 30 June, payment early next period  
Number of unclaimed balances paid to DTF 52 39
Value of unclaimed balances paid to DTF $1.3m $0.6m
Annual taxation returns            
Taxation returns and other assessments completed 6 294 7 195
Personal estate administration  
Total number of personal estates under administration (including SACAT orders, court awards and Powers of Attorney) 4 621 4 552
Number of new customers under SACAT Orders 393 402
New court award customers 31 29
Total funds received from new court awards $4.4m $4.5m
New Power of Attorney customers 42 36
Number of in-person meetings with Personal Estates Branch customers 1 000 872
Court awarded funds under administration (includes court award customers and court award trusts) $428.5m $439.2m
Reduced fee threshold $5 150 $5 050
% of customers under administration from whom no fees were collected 19% 17.6%
Trust activity  
New trusts 134 128
Trust matters finalised 180 204
Trusts on hand at 30 June 1 206 1 244
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 38 33
Completed trusts for children under the care of the Minister for Child Protection 5 3
Litigation guardian appointments  
Number of next friend/litigation guardian matters on hand 94 97
New litigation guardian customers 36 30
Private administrators and private managers – review of financial statements  
Private administrators appointed under the Guardianship and Administration Act 1993 1 684 1 524
Private managers appointed under the Aged and Infirm Persons’ Property Act 1940 177 179
Matters referred to SACAT for non – compliance 274 190
Information sessions for newly appointed administrators 10 15
Alternate executor administrations pursuant to a court order 492 307
Customer financial services activity     
Funds under administration (including superannuation) $1 227.5m $1 230.0m
New funds invested for the reporting period $52.6m $89.1m
Funds redeemed for the reporting period $40.0m $44.1m
Total Common Fund trades for the reporting period $1 281.3m $1 473.5m
Distributions to customers $15.0m $32.8m
Total number of payments made 432 264 425 068
Total value of payments made $283.9m $282.1m
Total customer funds receipted
value of pensions included

$325.2m

$86.9m

$338.6m

$76.9m

Total value of real estate properties held $364.2m $360.9m
Total value of managed customer assets $1 667.1m $1 665.2m

 Data for previous years is available at: https://data.sa.gov.au/data/organization/attorney-general-s-dept

Appendix 2: Audited financial statements 2019-20