STRATEGIC PLAN & BUDGET MTEF PERIOD 2011/12 -2013/14 Unemployment Insurance Fund UIF STRATEGIC PLAN MTEF 2011 -2014 1
VISION The Unemployment Insurance Fund strives to contribute to the alleviation of poverty in South Africa by providing effective short term unemployment insurance to all workers who qualify for unemployment and related benefits UIF STRATEGIC PLAN MTEF 2011 -2014 2
MISSION The central purpose and role of the Unemployment Insurance Fund is defined as: n Rendering an effective accessible service to all stakeholders n Being a sustainable organisation with sufficient reserves n Administering the Fund professionally UIF STRATEGIC PLAN MTEF 2011 -2014 3
LEGISLATIVE MANDATES Unemployment Insurance Act, 2001 as amended n The Unemployment Insurance Fund (UIF) was established in terms of section 4(1) of the Unemployment Insurance Act, 2001 (Act 63 of 2001) as amended n The Act empowers the UIF to register all employers and employees in South Africa UIF STRATEGIC PLAN MTEF 2011 -2014 4
Unemployment Insurance Contributions Act, 2002 n Section 8 of the Act empowers the SARS Commissioner to collect monthly contributions from both employers and workers who are required to register as employers in terms of the fourth schedule to the Income Tax Act and who are liable for the payment of the skills development levy in terms of the Skills Development Act, 1999 (Act 9 of 1999). n Section 9 of the Act empowers the Unemployment Insurance Commissioner to collect contributions from all those employers who are not required to register as employers in terms of the fourth schedule to the Income Tax Act and who are not liable for the payment of the skills development levy in terms of the Skills Development Act, 1999 (Act 9 of 1999). n These contributions are utilised to pay benefits and any other expenditure reasonably incurred relating to the application of this Act. UIF STRATEGIC PLAN MTEF 2011 -2014 5
SUMMARY OF THE STRATEGIC OUTCOMES & OBJECTIVES UIF STRATEGIC PLAN MTEF 2011 -2014 6
STRATEGIC OUTCOMES ( what we wish to achieve i. e. impact) Strategic Outcome 1 Improve collection of revenue from employers Goal Increase contributions collected by at least Statement a rate equal to the prevailing Consumer Price inflation index UIF STRATEGIC PLAN MTEF 2011 -2014 7
STRATEGIC OUTCOMES ( what we wish to achieve i. e. impact) Strategic Outcome 2 Improve payment of benefits to beneficiaries of the Fund Goal Increase the rate of processing claims in Statement order to pay within the targeted service levels and turnaround times. UIF STRATEGIC PLAN MTEF 2011 -2014 8
STRATEGIC OUTCOMES ( what we wish to achieve i. e. impact) Strategic Outcome 3 Participate in government initiatives of creating and sustaining decent employment Contribute in the various schemes designed Goal Statement to alleviate the harmful effects of unemployment which includes investing mandated funds in the Social Responsible Investments. UIF STRATEGIC PLAN MTEF 2011 -2014 9
STRATEGIC OUTCOMES ( what we wish to achieve i. e. impact) Strategic Outcome 4 Effective administration of the Fund’s operations Goal Maintain effective systems of internal Statement control as required by the Public Finance Management Act of 1999 (An unqualified audit opinion) UIF STRATEGIC PLAN MTEF 2011 -2014 10
STRATEGIC OBJECTIVES ( what we intend doing to achieve strategic outcomes) Strategic Objective 1: Fund Poverty Alleviation Schemes Output Performance Indicators 2011/12 2012/13 2013/14 Schemes aimed at alleviating the harmful effects of unemployment funded The number of schemes approved by the Unemployment Insurance Board. UI Board to consider additional 3 schemes by March 2012 in comparison to prior year based on merit and effectiveness. UI Board to consider additional 3 schemes by March 2013 in comparison to prior year based on merit and effectiveness. UI Board to consider additional 3 schemes by March 2014 in comparison to prior year based on merit and effectiveness. Percentage of total mandated Social Responsible Investment invested 70% of the mandated Social Responsibility Investment invested by March 2012 80% of the mandated Social Responsibility Investment invested by March 2013 95% of the mandated Social Responsibility Investment invested by March 2014 The Social Plan funded Allocate 80% of the budgeted funds as per the signed funding agreements by the end of March 2012 10% increase in funding by year end 15% increase in funding by year end UIF STRATEGIC PLAN MTEF 2011 -2014 11
STRATEGIC OBJECTIVES ( what we intend doing to achieve strategic outcomes) Strategic Objective 2: Improve Governance Output Performance Indicators 2011/12 2012/13 2013/14 Adequate and effective internal controls Oversight structures met deliverables according to adopted charters 100% compliance to UI Board , Audit Committee and Management Committee charters documents by 31 March 2012 100% compliance to UI Board , Audit Committee and Management Committee charters documents by 31 March 2013 100% compliance to UI Board , Audit Committee and Management Committee charters documents by 31 March 2014 Combined Assurance The approved annual plan executed by Internal Audits performed at HQ provincial offices for period Quarter 1 to 4. 80% of reports presented to and signed off by Management by March 2012 Internal Audits performed at HQ provincial offices for period Quarter 1 to 4. 90% of reports presented to and signed off by Management by March 2013 Internal Audits performed at HQ provincial offices for period Quarter 1 to 4. 90% of reports presented to and signed off by Management by March 2014 UIF STRATEGIC PLAN MTEF 2011 -2014 12
STRATEGIC OBJECTIVES ( what we intend doing to achieve strategic outcomes) Strategic Objective 2: Improve Governance (cont…) Output Performance Indicators 2011/12 2012/13 2013/14 Combined Assurance (cont. . ) Risk monitored in line with Risk Appetite framework Provide quarterly strategic risk monitoring reports within 30 days after the end of each quarter to the Unemployment Insurance Commissioner Implement fraud prevention strategy Automated electronic fraud detection system implemented Finalise 1 st phase of project according to the approved Project Plan and timeframes Implement 2 nd phase of project according to the approved Project Plan and timeframes Implement 3 rd phase of project according to the approved Project Plan and timeframes %Finalisation of the cases received and detected 85% of cases received or detected finalised by year end 90% of cases received or detected finalised by year end UIF STRATEGIC PLAN MTEF 2011 -2014 13
STRATEGIC OBJECTIVES ( what we intend doing to achieve strategic outcomes) Strategic Objective 3: Strengthen Institutional Capacity of the Fund Output Performance Indicators 2011/12 2012/13 2013/14 Skills Development Enhanced Staff developed as per the Workplace Skills Plan. 80% of planned training intervention implemented by end of quarter 4 85% of planned training intervention implemented by end of quarter 4 Employment equity Promoted People from designated groups appointed with the implementation of the new Head office structure in each occupational category and level 80% Employment Equity targets achieved in all occupational categories by end of March 2012 85% Employment Equity targets achieved in all occupational categories by end of March 2013 90% Employment Equity targets achieved in all occupational categories by end of March 2014 80% Employment Equity targets achieved in all occupational categories by end of March 2012 50% of women in Senior Management Services by end of March 2013 50% of women in Senior Management Services by end of March 2014 5% representation of people with disability by end of March 2012 5% representation of people with disability by end of March 2013 5% representation of people with disability by end of March 2014. UIF STRATEGIC PLAN MTEF 2011 -2014 14
STRATEGIC OBJECTIVES ( what we intend doing to achieve strategic outcomes) Strategic Objective 3: Strengthen Institutional Capacity of the Fund (cont…) Output Performance Indicators 2011/12 2012/13 2013/14 Establishment Maintained % Vacancy Rate 5% Vacancy rate by end of the March 2012 for Unemployment Insurance Head Office 5% Vacancy rate by end of the March 2013 for Unemployment Insurance Head Office 5% Vacancy rate by end of the March 2014 for Unemployment Insurance Head Office Information and communication Strategy. ICT strategy developed and approved by the Unemployment Insurance Fund’s management committee Information strategy presented to the Unemployment Insurance Fund’s Management Committee by June 2011. Implementation plan approved by management committee by December 2011 and phase 1 executed from April 2012. Phase 2 of the implementation plan executed from April 2013. Implementation plan for ICT strategy approved by the Unemployment Insurance Fund’s management committee UIF STRATEGIC PLAN MTEF 2011 -2014 15
STRATEGIC OBJECTIVES ( what we intend doing to achieve strategic outcomes) Strategic Objective 4: Encourage compliance through enhanced service delivery Performance Indicators 2011/12 2012/13 2013/14 Output Technology to improve service delivery implemented % of claims approved or rejected within 5 weeks 80% of claims approved or rejected within five weeks of application as reflected in the Fund’s operational system (SIYAYA) 82. 5% of claims approved or rejected within five weeks of application as reflected in the Fund’s operational system (SIYAYA) 85% of claims approved or rejected within five weeks of application as reflected in the Fund’s operational system (SIYAYA) % of contributions allocated within 30 days Improved client service 80% of contributions deposits allocated within 30 days of receipt. 85% of contributions deposits allocated within 30 days of receipt 90% of contributions deposits allocated within 30 days of receipt Claims processing capacity/functionality extended to employers 70% Increase in the number of employers using the Virtual Office for maternity claims as compared to prior year by March 2012 80% Increase in the number of employers using the Virtual Office for maternity claims as compared to prior year by March 2013 An additional benefit type added to the virtual office in Quarter 1 90% Increase in the number of employers using the Virtual Office for maternity claims as compared to prior year by March 2014. UIF STRATEGIC PLAN MTEF 2011 -2014 16
STRATEGIC OBJECTIVES ( what we intend doing to achieve strategic outcomes) Strategic Objective 4: Encourage compliance through enhanced service delivery(cont…) Performance Indicators 2011/12 2012/13 2013/14 Output Technology to improve service delivery implemented (cont. . ) %increase on usage of UFiling system 20% increase in Employers using UFiling as compared to prior year by March 2012 20% increase in Employers using UFiling as compared to prior year by March 2013 20% increase in Employers using UFiling by as compared to prior year March 2014 Increased Revenue Inflows %increase in number of newly registered employers 5% increase in the number of new employer registrations as compared to previous year by March 2012 5% increase number of new employer registrations as compared to previous year by March 2013 5% increase in number of new employer registrations as compared to previous year by March 2014 % increase in contributions revenue CPI % increase as compared to previous year by March 2012 CPI % increase as compared to previous year by March 2013 CPI % increase as compared to previous year by March 2014 Collection as a % of Overpayment balance Collect 18% of outstanding balance of overpayments as per prior year audited closing balance by March 2012 Collect 20% of outstanding balance of overpayments as per prior year audited closing balance by March 2013. Collect 22% of outstanding balance of overpayments as per prior year audited closing balance by March 2014 Reduced Losses for the Fund UIF STRATEGIC PLAN MTEF 2011 -2014 17
STRATEGIC OBJECTIVES ( what we intend doing to achieve strategic outcomes) Strategic Objective 5: Improve Stakeholder Relation Output Performance Indicators 2011/12 2012/13 2013/14 Public educated and informed about UIF services and obligations Communication campaigns undertaken 6 Communication campaigns conducted by March 2012 and submit reports on effectiveness to UI Board on a quarterly basis. 7 Communication campaigns conducted by March 2013 and submit reports on effectiveness to UI Board on a quarterly basis. 8 Communication campaigns conducted by March 2014 and submit reports on effectiveness to UI Board on a quarterly basis. Diversified publications utilised. Publication campaign to reach at least 16 million people according to GCIS/All Media Survey by March 2012 Publication campaign to reach at least 16 million people according to GCIS/All Media Survey by March 2013 Publication campaign to reach at least 16 million people according to GCIS/All Media Survey by March 2014 Memorandum of Understanding (MOU) signed with the stakeholders and relevant government entities. 3 MOUs signed by March 2012. 3 Additional MOUs signed by March 2014. Implementation Report to all governance structures on a quarterly basis. Strategic Alliances with relevant government entities and other stakeholders UIF STRATEGIC PLAN MTEF 2011 -2014 18
BUDGET MTEF 2011/12 - 2013/14 n UIF MTEF BUDGET FOR THE FINANCIAL YEAR 2011/12: ESTIMATED INCOME AND EXPENDITURE UIF STRATEGIC PLAN MTEF 2011 -2014 19
BUDGET MTEF 2011/12 - 2013/14 Budget assumptions for MTEF 2011/12 UIF Contributions n The contribution revenue projection at a rate of 7% as supplied by the Funds Actuaries is aligned with expectations of marginal economic recovery and subdued job creation including improved compliance. Investment Income n The Funds investment income decline with 16% based on the current investment portfolio maturity profile and declining interest rates. The investment income is estimated to show a growth of 12% from the prior year lower base, increase in the portfolio based on the deposit of the Funds budgeted surpluses and expected increase in interest rates over the longer term. Benefit Payments n Total benefits expenditure is based on the Actuarial year-end valuation report as at 31 March 2010. The revised estimated value of benefit payable for 2010/11 is R 6, 5 billion, an increase of approximately 7% when compared to 2009/10 original budget (MTEF 2011/12 R 7. 5 billion, 2012/13 R 8. 5 billion and 2013/14 R 9. 8 billion). The 2011/12 estimated value of benefit payable at R 7. 5 bn is 14. 40% higher than 2010/11 revised budget based on expected growth due to salary increases and additional claims due to improved awareness and economic conditions. Unemployment alleviate Schemes n Training Layoff Scheme R 1. 2 Billion ringfenced – Expenditure over next 4 years n Training of the Unemployed Schemes – Reintegrate the unemployed in to the workplace - Productivity SA, Mining Quality Agency, SETA projects, Training pilot project in cooperation with Do. L Public Employment Services R 200 Million budget over MTEF period increasing marginally with National Treasury CPI Administration Expenditure n The total administrative expenditure represents 9. 06% of total revenue and 11. 45% of contributions revenue and 9. 98% of contribution revenue by 2013/2014. This is based on a very conservative revenue growth budget of 7% UIF STRATEGIC PLAN MTEF 2011 -2014 20
HIGHLIGHTS FOR THE YEAR TO DATE FUND POVERTY ALLEVIATION SCHEMS Industrial Development Corporation (IDC) - R 2 billion bond IDC drew down R 1 billion these funds are available to start up businesses, to provide a debt portion of expansionary acquisitions for existing businesses and to facilitate working capital funded expansions. Based on approved business plan funding to date there is a possibility to create 9 355 jobs and save 5 365 jobs. Training Layoff Scheme R 1. 2 Billion (Budget over the MTEF period) The improvement of the schemes benefits to 6 months were concurred to by the Minister of Labour and the Minister of Higher Education and Training. Jointly an amount of R 40 million was spent towards alleviating the effects of recession. As a result of this programme, 19 companies and 6 351 workers were assisted through the Do. L/ DHET training lay-off scheme. Social Responsible Investment The has invested 68 per cent of its Investment portfolio in Central Government, Municipals and Parastatal bonds and money market instruments that support infrastructure projects that will create and sustain jobs. This is an investment of R 35 billion UIF STRATEGIC PLAN MTEF 2011 -2014 21
HIGHLIGHTS FOR THE YEAR TO DATE Training and Social Plan Funding The UIF has taken further steps by setting aside R 1 billion over the 2009/10 – 2013/14 MTEF period for schemes aimed at re-integrating unemployed UI beneficiaries back into employment. q Providing assistance to Productivity South Africa through allocation of funding to Social Plan development. For the 2010/11 financial year R 48 million has been committed. q Accelerated Artisan Training Programme (AATP) pilot that enrolled a total of 324 candidates are in its finalisation stages. STENGHTEN INSTITUTIONAL CAPICITY Vacancy rate The UIF has achieved 6% vacancy rate and HRM is in the process of filling the remaining 27 vacancies. UIF STRATEGIC PLAN MTEF 2011 -2014 22
For the period ending January HIGHLIGHTS FOR THE YEAR TO DATE ENCOURAGE COMPLIANCE THROUGH ENHANCED SERVICE DEILVERY Unemployment Benefits The fund paid benefits to 693 000 beneficiaries a total amount of R 4. 9 billion experienced a very slight decrease in unemployment benefit payments compared to the same period in the year 2009/10. Increased Revenue Inflows Contribution Revenue collected for the period ending January 2011 was R 9, 361 billion that is 4. 36% up against prior year Improve number of employers using U-filing up to January 2011 Active Employers increased with 24 759 and increased of 62% on prior year. Reduced losses for the Fund Collect at least 15% of the outstanding balance of benefits paid in error recovery for the period ending January 20100 amounted to R 46, 027 million an increased of 36% UIF STRATEGIC PLAN MTEF 2011 -2014 23
For the period ending January HIGHLIGHTS FOR THE YEAR TO DATE IMPROVE STAKEHOLDER RELATIONS Communication campaigns and publications UIF continue to market the Fund through media coverage and engagements with stakeholders as a way to improve the compliance rate. Briefing sessions were organized, national road shows were held with taxi associations to educate them about the services offered by the Fund. 160 000 Z - folders were produced for U-filing system, fraud & risk pamphlets and posters were distributed to increase awareness to employers of the new U-Filing system. The UIF Communication section constantly work with GCIS on the branding and marketing of the UIF service offerings and compliance requirements through television radio and printed media. UIF STRATEGIC PLAN MTEF 2011 -2014 24
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