PLSL Update 1 June 2009

 

Dear Members

At the State Budget briefing, Minister Neville announced that further negotiation would take place around a suitable PLSL scheme for the community sector. The Centre had advocated strongly for this change of direction from the government and with the backing of its members will continue to advocate for a scheme which has a sound business case, minimal risk and is properly thought through.

 

At the subsequent PLSL reference group meeting held on 26/5/09 the following matters were considered.

 

1. An amended draft scoping framework was discussed. This approach moves away from using awards as a mechanism for includion in the sceme to a 3 level filter system,

    1. NFP & non-government

    2. Involvement in Community Services &

    3. Within nominated job categories

 

    Generally, the feeling was that the scope of coverage in this document was an  improvement on previous work. However, some discussion is still required around multi-service providers particularly where some of that provision does not meet the non-government and non-profit criteria, ie business units.

 

It is hoped the new scoping document will be available next week for sector discussion.

 

2. Financial Update and business case.

 

   Work was still being carried out on these issues by the actuaries and will be made available as soon as possible although finance modelling is somewhat dependant on the scope. Work on a calculator for CSO's is also being carried out and will be made available to Peaks to distribute for testing.

 

  An assurance was given that finance work would be done and made available on the other two models now being talked of,

   i.  A hybrid model where the use of a central fund would only be triggered when an employee moves CSO after 3 years service,

  ii   A model where no central fund exists. Where an employee moves CSO after 3 years they will have a payment for their accrued PLSL sent to their new employer. If that employee moves again the process is repeated. An issue does exist as to what happens if this employee then leaves the sector altogether prior to an actual entitlement to PLSL. 

 

3. Legislation & Timetable

 

   The Government is still committed to both PLSL and a legislative timetable prior to the next election but the work required to deliver a viable scheme is still considerable. It appears there is now a clearer understanding of the resources required to do that work in the timeframe they have set and so that a viable scheme may be developed. 

 

Please contact me if you wish to discuss any matters to do with PLSL. The involvement of specialists and leaders in the sector was critical in ensuring the Government provided more work and time to this initiative.  Continued involvement will hopefully ensure the sector can at some time in the future make a considered and professional judgment.

 

Dan Gleeson

Manager, Membership & Operations

1 June 2009.

 

 

 

 

PLSL Update 29 April 2009

 

Dear Members

 

Last Friday (24/4/09) Coleen Clare wrote to Minister Neville on behalf of our members, advising our sector could not support the model of Portable Long Service Leave proposed by the Government.

 

The Minister was made aware that whilst the sector commended the work to bring long service portability to the sector, the business case for PLSL had not been proven given the lack of a detailed cost/benefit study, and the risks and costs involved that concern our members include the following:

• loss of capital from member balance sheets to the scheme,
• cost to members, included in the premium of the administration of the scheme,
• loss of investment income and opportunity as LSL entitlements are paid to the scheme,
• increased complexity and cost for members in managing entitlements above those proposed by the scheme.

Our sector has requested the Minister provide more time for development of an alternative model and informed her that the sector feels very strongly that it has been asked to fully fund the sceme whilst dealing with other rising business and compliance costs.

 

Please feel free to contact Dan Gleeson, Manager Membership & Operations about this matter - phone (03) 9614 1577 or email: dan.gleeson@cwav.asn.au 

 

____________________________________________________________________________

 

During early November 2008, the Minister for Community Services convened a reference group to advise her on the development of a portable long service leave scheme (PSL scheme) for employees in the community sector.  The Government set aside $1.2 million in the Strengthening Community Organisations Plan (SCOP) to establish this scheme.  The Department of Human Services is managing the establishment of this scheme in Victoria.

 

It is envisaged that the PSL scheme is to increase the viability of the community services sector by improving the sector’s capacity to attract and retain workers, by rewarding long term employees who remain within the sector, and fostering staff development by encouraging movement across the sector.

 

The Centre and a member of the Centre’s Board of Directors are represented on the reference group to ensure that the voice of our sector is represented in the development of the PSL scheme, and advise the government in its development. 

 

Representatives from other sectors in the community services area are also part of this group.

Consultants from Bendzulla Actuarial Pty Ltd had been commissioned by DHS to undertake a feasibility study on the establishment of such a scheme and explore possible models that could be used in Victoria.  Based on the feasibility study and recommendations from the actuarial consultants, the Minister has endorsed the development of a PSL scheme with the following key features:

 

·      The scheme will be prospective; it will pay the employee the component of entitlement accrued since establishment of the scheme.  In the transition period, the employer remains wholly liable for payment of entitlements accrued before the scheme commenced.

 

·      The scheme will be compulsory for all community services sector employers.  Whilst a voluntary scheme was considered, a compulsory scheme ensures critical mass of employers contributing from the outset that will enable the scheme to be viable and sustainable and is the only way to ensure portability of entitlements across the sector.

 

·      The scheme will be enabled by State legislation to ensure that all eligible employees are able to access the scheme.  Legislation will be developed over the next year and will be introduced into Parliament in Spring 2009.

 

·      Employees will be entitled to long service leave benefits commensurate with those described in the Long Service Leave Act 1992, which entitles employees to 8.66 weeks of leave after ten years of service.

 

As you can see, there are many issues that need to be addressed before the scheme can be set up for the sector.  The Department’s plan to undertake this work is set within an ambitious timeframe to introduce legislation within Parliament at the Spring session of 2009.  The consultation process that is envisaged with the sector is scheduled for January 2009.  The Centre will be in touch through this website and monthly members newsletter to keep members updated on the consultation process and seek your input into this important work.

 

Dear Members

I have attached a file which provides answers to questions I raised with the Actuary working on Portable Long Service for the sector.

 

Time permitting, I would appreciate comments by COB 23/3/09 in preparation for the Reference Group meeting scheduled 25/3/09.

 

I have also included a link to our web page on this matter http://www.cwav.asn.au/advocacy/pages/plsl.aspx

 

For more information please visit http://www.dhs.vic.gov.au/pdpd/csif/downloads/plsl-discussion-paper-3mar09.pdf