Premier & Cabinet

Type:
Premier's Memorandum
Identifier:
M2006-15
Status:
Archived

M2006-15 2006 Annual determination of remuneration of Chief Executive and Senior Executive Services

Description

This Memorandum is superseded by M2007-17.

Detailed Outline

The Statutory and Other Offices Remuneration Tribunal has made its annual Determination in relation to the Chief and Senior Executive Services (SES). The Report and Determination were published in the Government Gazette of 13 October 2006 and takes effect from 1 October 2006. It is available on the internet at www.remtribunals.nsw.gov.au.

In summary, the Tribunal has determined a general increase to SES remuneration packages of 4%. All increases are subject to a satisfactory assessment of performance. The Recruitment Allowances and Retention Allowances will remain unaltered at 2003 levels.

Administrative Guidelines on how the Determination should be implemented are attached.

Enquiries concerning the implementation of the Determination should be made to the Premier's Department contact officers specified in the guidelines.

It should be noted that State Owned Corporations are not covered by this Determination.

Morris Iemma MP
Premier


Issued : Workforce Policy and Advice (Public Employment Office)
Contact: Cathy McInnes, Senior Industrial Officer
EMail: [email protected]
Telephone no: 9228 3598 Facsimile: 8243 9489
File no: PSM/08027
Date: 26 October 2006
This memorandum is superseded by M2007-17.
 
 _____________________________________________________

Implementing the 2006 SOORT Determination for the remuneration of
Chief Executive and Senior Executive Service

Administrative Guidelines

The Statutory and Other Offices Remuneration Tribunal (SOORT) has made its annual determination in relation to the Chief Executive and Senior Executive Services. In these Guidelines the Chief Executive and Senior Executive Services are referred to as the 'SES'.

These Guidelines describe the administrative and remuneration arrangements that are to apply to the SES on and from 1 October 2006. They should be read in conjunction with the 2006 SOORT Determination for the Chief Executive and Senior Executive Services published at www.remtribunals.nsw.gov.au.

Premier's Memorandum 2003-15 should be referred to when implementing the SOORT Determination. The Memorandum advises that all CES and SES officers are required to have a Performance Agreement in place. The Performance Agreement and annual review form the basis of any remuneration increase in the implementation of any SOORT determination. Performance reviews are to be undertaken at least annually by the officer's employer or some other person nominated by the employer.

1. Applying Remuneration Increases

1.1 General Increase
SOORT has determined a general increase of 4% to the remuneration packages of SES officers on and from 1 October 2006. In applying the increase, SOORT has rounded minimum and maximum rates to the nearest $50.

Any decision to grant an increase determined by SOORT must be based on a formal assessment of the officer's performance as being of a satisfactory standard. No executive can be remunerated beyond the maximum for their level.

Table 1. New annual remuneration rates (effective 1 October 2006)

SES Level

 Minimum

   Maximum

  $137,800

   $161,350

2

  $161,351

   $173,100

3

  $173,101

   $196,650

4

  $196,651

   $214,350

5

  $214,351

   $247,300

6

  $247,301

   $278,000

7

  $278,001

   $348,600

8

  $348,601

   $402,750

 
2. Discretion to alter remuneration within the range

Ministers (in the case of CEOs) and the CEOs (in the case of SES) have the authority to determine any progression along the range for SES officers whose existing remuneration package is at or above the minimum for their SES level.

On appointment
The rate of remuneration for officers within the new range may be determined on appointment at the discretion of the Minister (in the case of CEOs) or the CEO (in the case of SES).

During term
The rate of remuneration of SES officers during the term of their appointment can be altered within the range at the discretion of the Minister (in the case of CEOs) or the CEO (in the case of SES).

Any decision to progress an officer's remuneration along the range should be based on a rigorous assessment of the officer's performance or the general skill and expertise acquired in performing the duties over time. Such a decision may only be made at the time of a performance review. Performance reviews must be undertaken at least annually.

In making these decisions the matters to be considered must include either:

  • An officer's performance which over time has significantly contributed to the agency meeting its corporate objectives and outcomes as outlined in the agency's business plan; or
  • An officer's increased competence and effectiveness as assessed in the performance review process; or
  • Any expanding job requirements (where a position's work value has increased but not sufficiently to result in the position being evaluated at a higher level).

3. Recruitment Allowances and Retention Allowances

Two separate allowances are provided to manage issues of attracting and retaining suitably qualified officers within the public sector. These are the Recruitment Allowance and the Retention Allowance.

The payment of a Recruitment Allowance or a Retention Allowance can be made only following approval by the Director-General of Premier's Department based on a recommendation of the Minister (in the case of CEOs) or the CEO (in the case of SES).

SES officers in receipt of a Recruitment Allowance are not eligible for payment of a Retention Allowance. Likewise, SES officers in receipt of a Retention Allowance are not eligible for payment of a Recruitment Allowance.


3.1 Recruitment Allowance (from the commencement of a term of appointment)

A Recruitment Allowance may apply for newly appointed SES officers (and for current SES officers if they are re-appointed at the expiration of their current term). A Recruitment Allowance recognises the changing working environment as the labour market continues to see the need for new capabilities additional to those previously identified. The changing labour market may also make it difficult to attract suitably qualified candidates to a position. The Recruitment Allowance will apply where it has been certified that specific capabilities are necessary for recruitment purposes and the performance of the duties of the position.

Ministers (in the case of CEOs) and CEOs (in the case of SES) must seek approval from the Director-General, Premier's Department to offer a Recruitment Allowance.

It is important to note that Recruitment Allowances lapse on the completion of a term of appointment. A fresh approval must be sought for a Recruitment Allowance, if a case exists, on renewal of the appointment.

Issues to be addressed when seeking approval from the Director-General, Premier's Department:

  • Current difficulties in recruiting and retaining SES officers
    • Patterns of responses to advertising/recruitment for particular positions
    • Limitations in the number of potentially qualified applicants
    • Impact on project/programs (eg. turnover costs, delays) through non selection
  • Recruitment practices
    • Variety of recruitment options that have been canvassed
  • Current state of labour market
    • Current state of labour market and the need to increase the agency's competitiveness through offering market related remuneration
    • Current market remuneration for comparable skills and experience
  • Requirement to achieve results
    • Specific specialist, professional qualifications and/or experience in the nominated area that is considered an essential requirement for achievement of the position's objectives.

The criteria outlined above should not be varied. However, where exceptional circumstances warrant special consideration, it is appropriate to liaise with the Director-General, Premier's Department with a view to resolving particular difficulties. Table 2 provides the annual rates of the Recruitment Allowance at different SES levels.

Table 2: Annual rates for Recruitment Allowances (effective 1 October 2006)

SES Level

Maximum Allowance

1 and 2

Up to $15,000

3 and 4

Up to $19,000

5 and 6

Up to $27,000

7 and 8

Up to $35,000


Quantum of Recruitment Allowance
Subject to approval of a Recruitment Allowance, Ministers (in the case of CEOs) and CEOs (in the case of SES) may determine the quantum of the allowance up to the maximum for the level of the position (shown in Table 2 above). These rates remain unchanged from the 2003 Determination.

Once the quantum has been determined it cannot be altered during the term of the officer's current appointment unless the Director-General, Premier's Department gives approval. Where approval is given to increase the Recruitment Allowance during the term of the appointment, the increased portion of the Recruitment Allowance is payable from the date of approval to increase.

Treatment of Recruitment Allowance
The Recruitment Allowance is an annual flat rate allowance. The Total Remuneration Package (TRP) for officers receiving a Recruitment Allowance consists of two components – the rate of remuneration determined within the range by the Minister (in the case of CEOs) and the CEO (in the case of SES), plus the Recruitment Allowance. Increases granted as a result of the annual determination do not apply to the Recruitment Allowance.

NB - Since the Recruitment Allowance forms part of an SES officer's TRP, it is included in the calculation of leave cash out for notional salary purposes (see Circular 2006 – 22), and is superable.

Financial advice
Where approval is given to pay a Recruitment Allowance the SES officer is advised to seek independent financial advice regarding their financial arrangements including superannuation arrangements and future taxation obligations.


3.2 Retention Allowance (during the term of the appointment)

A Retention Allowance may be applied for officers during the term of their current appointment. The Retention Allowance assists in retaining SES officers during their contract period who may otherwise be attracted to take a position either elsewhere in the public sector or outside the public sector.

Ministers (in the case of CEOs) and CEOs (in the case of SES) must seek approval from the Director-General, Premier's Department to offer a Retention Allowance.

It is important to note that Retention Allowances lapse on the completion of a term of appointment. A fresh approval must be sought for a Recruitment Allowance, if a case exists, on renewal of the appointment.

Issues to be addressed when seeking approval from the Director-General, Premier's Department:

  • Current difficulties in retaining SES officers
    • Impact on project/programs if the officer leaves the position (eg. delays in achieving outcomes, loss of unique or specific capabilities and experience, turnover costs)
    • Evidence of turnover that has adversely affected the agency's programs, if applicable.
  • Current state of labour market.
    • Current state of labour market and the need to increase the agency's ability to make a competitive counter offer.
    • Current market remuneration for comparable skills and experience.
  • Requirement to achieve results
    • The officer's specific specialist, professional qualifications and/or experience in the nominated area that is considered an essential requirement for achievement of the position's objectives.

The criteria outlined above should not be varied. However, where exceptional circumstances warrant special consideration, it is appropriate to liaise with the Director-General, Premier's Department with a view to resolving particular difficulties. Table 3 provides the annual rates of the Retention Allowance at different SES levels.

Table 3: Annual rates for Retention Allowances (effective 1 October 2006)

SES Level

Maximum Allowance

1 and 2

Up to $15,000

3 and 4

Up to $19,000

5 and 6

Up to $27,000

7 and 8

Up to $35,000



Quantum of Retention Allowance
Subject to approval of a Retention Allowance, Ministers (in the case of CEOs) and CEOs (in the case of SES) may determine the quantum of the allowance up to the maximum for the level of the position (shown in Table 3 above). These rates remain unchanged from the 2003 Determination.

Once the quantum has been determined it cannot be altered during the term of the officer's current appointment unless the Director-General, Premier's Department gives approval. Where approval is given to increase the Allowance during the term of the appointment, the increased portion of the Allowance accrues from the date of approval to increase.

Treatment of Retention Allowance
The Retention Allowance is paid as a one-off lump sum bonus, and is not payable until the completion of the officer's appointment. The Allowance accrues on an annual basis, and pro-rata for incomplete years. The lump sum payment is separate to the TRP, and will not count for superannuation purposes.

In this context the 'completion of the officer's appointment' is defined as:

  • an officer's term of appointment expires; or
  • the officer retires from office; or
  • the officer is removed and unattached from the position pursuant to section 77 of the Public Sector Employment and Management Act 2002 (PSEMA) and subsequently appointed to another position; or
  • an officer's unattachment is revoked pursuant to s77 of the PSEMA; or
  • the officer is appointed to another SES position within the NSW public sector. This includes appointments at a higher level and transfers; or
  • an officer dies.

The Allowance will not be available where an officer resigns or is removed from office pursuant to s51 of the PSEMA. An Allowance should also not be paid if the officer's performance has been less than satisfactory.

Increases granted as a result of the annual determination do not apply to the Retention Allowance.

NB - Since the payment of a Retention Allowance is contingent upon an SES officer completing their term of appointment, it is not certain that the officer will in fact be paid the Retention Allowance. The Retention Allowance is not considered part of an officer's Total Remuneration Package and does not form part of the notional salary for leave cash out purposes (eg it is not counted at the time of separation for recreation and long service leave calculations).

Financial advice
Where approval is given to pay a Retention Allowance the SES officer is advised to seek independent financial advice regarding their financial arrangements including superannuation arrangements and future taxation obligations.

Further enquiries
SES officers should contact their agency SES Administrator if they have any enquiries. SES Administrators may direct their enquiries to:

Melinda Savvides 9228 3579
Cathy McInnes 9228 3598
Gary McGrath, 9228 4381

Overview

Compliance

Not Mandatory

AR Details

Date Issued
Oct 28, 2006
Review Date
Oct 28, 2016
Replaces
Replaced By

Contacts

Contact
Contact us
Phone
02 9228 5555
Publishing Entity
Department of Premier and Cabinet
Issuing Entity
Department of Premier and Cabinet