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HORSHAM RURAL CITY COUNCIL


NOTES TO THE FINANCIAL STATEMENTS (Cont.) FOR THE YEAR ENDED 30th JUNE, 2014


31 RESTRICTED ASSETS


2014 $'000


2013 $'000 ------------------- --------------------


Council has cash and cash equivalents (note 17) that are subject to restrictions. As at the reporting date, Council had legislative restrictions in relation to reserve funds (Recreational Lands Reserves). Recreation reserve (note 27)


Trust funds and deposits (Note 24) Unexpended grants (note 5)


231 654


4,925


219 700


------------------- -------------------- 5,810


5,243 6,162


=========== ============ 32 SUPERANNUATION


Horsham Rural City Council makes all of its employer superannuation contributions in respect of its employees to the Local Authorities Superannuation Fund (the Fund). This Fund has two categories of membership, accumulation and defined benefit, each of which is funded differently. The defined benefit section provides lump sum benefits based on years of service and final average salary. The defined contribution section receives fixed contributions from Horsham Rural City Council and the Council's legal or constructive obligation is limited to these contributions.


Obligations for contributions to the Fund are recognised as an expense in the Comprehensive Operating Statement when they are due.


Accumulation The Fund's accumulation category, Vision My Super/Vision Super Saver, receives both employer and employee contributions on a progressive basis. Employer contributions are normally based on a fixed percentage of employee earnings (for the year ended 30 June 2014, this was 9.25% required under Superannuation Guarantee Legislation).


Our commitment to defined contributions plans is limited to making contributions in accordance with our minimum statutory requirements.


No further liability accrues to the Council as the superannuation benefits accruing to employees are represented by their share of net assets of the Fund.


Effective from 1 July 2014, the Superannuation Guarantee contribution rate will increase to 9.5%, and will progressively increase to 12% by 2019. Based on announcements included in the May 2014 Federal Budget, this progressive increase to 12% will be delayed until 2022.


Defined Benefit As provided under Paragraph 34 of AASB 119, Horsham Rural City Council does not use defined benefit accounting for its defined benefit obligations under the Fund's Defined Benefit category. This is because the Fund's Defined Benefit category is a multi-employer sponsored plan. As a multi-employer sponsored plan, the Fund was established as a mutual scheme to allow for the mobility of the workforce between the participating employers without attaching a specific liability to particular employees and their current employer. Therefore, there is no proportional split of the defined benefit liabilities, assets or costs between the participating employers as the defined benefit obligation between the participating employers and the only time that the aggregate obligation is allocated to specific employers is when a call is made. As a result, the level of participation of the Council in the Fund cannot be measured as a percentage compared with other participating employer. While there is an agreed methodology to allocate any shortfalls identified by the Fund Actuary for funding purposes, There is no agreed methodology to allocate benefit liabilities, assets and costs between the participating employers for accounting purposes. Therefore, the Actuary is unable to allocated benefit liabilities, assets and costs between employers for the purposes of AASB 119.


Annual Report 2013-2014 q 126 Page 45


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