3. Features of key remuneration components

3.1 Comparison of key remuneration components by classification

The comparison of the different components of a total remuneration package provides an understanding of the contribution that each component makes to the whole.

Table 3.1 provides data on the makeup of remuneration paid across all classifications. It provides the proportion that Base Salary, benefits and bonuses contribute to remuneration as a whole.

For all classifications, the largest component of remuneration apart from Base Salary is the employer superannuation contribution.

Across the non-SES classifications, the Base Salary makes up between 84.1% and 86.8% of the remuneration received by employees. The TRP component makes up between 13.2% at the Graduate classification and 15.2% at the EL 2 level: most of which is the employer superannuation contribution.

At the SES levels, the benefits component provides a greater contribution to the whole remuneration package compared to the non-SES classifications. This varies from 22.1% at the SES 3 classification to 24.9% at the SES 1 classification. The benefits component is primarily composed of the employer
superannuation contribution and motor vehicle arrangements.

Bonus payments continue to make up only a minor part of the whole remuneration package. The use of performance bonus arrangements has continued to decline. Bonuses contribute to between 0.2% and 1.1% of all remuneration received in the SES classifications and up to 2.0% for the non-SES classifications.

Further information on the breakdown of Base Salary, TRP, and Total Reward can be found in Section 7: Remuneration Findings by Classification.

3.2 Motor vehicle allowances

Motor vehicle cost is the annualised cost of a motor vehicle that an employee is able to use for private use. This includes the provision of a motor vehicle, running costs, insurance, repairs, maintenance and any fringe benefits tax payable. Cash-in-lieu of a vehicle is the total paid to an employee
where they opt for cash instead of a motor vehicle. Table 3.2 combines these allowances by classification.

Consistent with previous years, the use of motor vehicle allowances or, cash in-lieu of motor vehicle allowances, was low in the non-SES classifications. The highest use of motor vehicle allowances at these classifications was at the EL 2 classification with 2.8% of employees receiving a benefit. The
number of employees at other non-SES classifications that received a motor vehicle was very small.

There was a reduction in the proportion of SES employees who received some form of motor vehicle related allowance from 74.5% in 2013 to 72.3% in 2014.

Both the median and average amounts paid for motor vehicle benefits increased for SES 1 and SES 3 classifications. The median increases were $750 for SES Band 1 and $354 for SES Band 3.

3.3 Performance bonus

Performance bonuses may be available to APS employees through an enterprise agreement or other employment instrument, for example a common law contract. The availability, eligibility and amounts vary across agencies. While performance is also recognised through other mechanisms such as salary or incremental
advancement (which is reflected in Base Salary movement) this section reports only on performance bonus payments.

There were 22,894 employees (16.7%) of the non-SES workforce, and 297 (12.3%) of the SES workforce who received a performance bonus in 2014.

The proportion of employees who received performance bonuses varied across the non-SES classification levels from 0.5% at the Graduate level to 26.6% at the EL 2 classification.

Due to the low proportion of use of performance bonuses at the non-SES classifications, the figures at these classifications have been dominated by three agencies which have a high proportion of their workforce at the top of their classification salary ranges. The enterprise agreements covering these
agencies provide for a bonus payment, in lieu of salary advancement, linked to satisfactory performance.

Figure 3.1 shows that the proportion of SES employees that received a performance bonus of the past five years. The proportion of SES employees that received a bonus in 2014 is about a third of the proportion in 2010. The reduction in the use of performance bonuses for SES employees appears to have
levelled off.

The median and performance bonus values increased across all SES classifications between 2013 and 2014, but the average increased only for the SES 2 and SES 3 classifications.

Figure 3.1: SES performance bonus usage, 2010 to 2014

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Source: 2004–2010 APS Remuneration Surveys, 2011–2014 APS Remuneration Reports

3.4 Superannuation

The median employer superannuation contribution for the Graduate to EL 2 classifications in 2014 was between 15.4% and 17.1% of the employee's base salary, dependent on the superannuation scheme that individual employees participated in.

APS employee superannuation fund membership has been reported by four categories:

• The Commonwealth Superannuation Scheme (CSS);
• The Public Sector Superannuation Scheme (PSS);
• The Public Sector Superannuation Accumulation Plan (PSSap) and
• 'Other'.

As the CSS and PSS closed to new members in 1990 and 2005 respectively, there were no APS employees in the CSS from 35–39 years of age and below, and very few under 25 years of age in the PSS.

There were 67,694 APS employees, or 48.6% of the APS workforce, in the PSS and 57,071 employees, or 40.9% of the workforce, in the PSSap. There has been a slight reduction since last year in the proportion of employees in the CSS and PSS with a corresponding increase in proportion of employees in the
PSSap.

Figure 3.2 provides information on the proportional distribution of superannuation scheme membership by classification. As a general trend, the PSSap membership decreases as the classification increases, reflecting this as the default fund in the APS since 2005. Conversely, the proportion of employees
in the CSS are higher at higher classifications, reflecting employees who have been in the service for longer.

Only 4.2% of APS employees were members of the Commonwealth Superannuation Scheme, down from 5.1% in 2013 with approximately 33.8% of them aged 55 years or over. These members represent a significant proportion of the SES workforce: 20.6% at the SES 1 level, 33.8% at the SES 2 level and 37.6% of the
SES 3 level.

A high employer superannuation contribution (compared to base salary) can be the result of several things: a higher salary for superannuation purposes; an employee performing an eligible period of higher duties when their superannuation was calculated; and annualising superannuation paid fortnightly,
based on ordinary time earnings for a fortnight with a large amount of shift work or overtime. Data is shown in Table 3.7.

Table 3.5 'Number of employees by superannuation fund and age group' provides important information for workforce planning. Due to the nature of the scheme, the CSS may provide a disincentive for its members to work beyond 55 years of age in some circumstances.

Figure 3.2: Employer superannuation contributions by classification

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Source: Table 3.4