Long Service Provisions – on costs – how is this going to change next year?
• At present Faculties and Divisions recognise LSL as it is incurred when a staff member takes LSL or the full amount on termination. This makes it difficult to budget and prudently manage the accruing costs in the long term. • From 2008, LSL will be managed centrally, thereby avoiding these unplanned variances from budget at Faculty and Divisional level. 3.3% will be added to On costs and when a staff member takes 3 months LSL, their Faculty or Division will be credited with the entire cost – thereby allowing a replacement to be engaged if required. • The calculation of 3.3% is based on recent history and if there is surplus at the end of the financial year, it will be credited. Remember that the LSL provision is accrued at the historic salary rate, however the provision has to allow for funding at the current rate.
