uif strategic plan mtef 2011-2014 1 strategic plan & budget mtef period 2011/12-2013/14...

UIF STRATEGIC PLAN MTEF 2011-2014

1

STRATEGIC PLAN & BUDGETMTEF PERIOD 2011/12-2013/14

Unemployment Insurance Fund

STRATEGIC PLAN & BUDGETMTEF PERIOD 2011/12-2013/14

Unemployment Insurance Fund


2

VISIONVISION

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


3

MISSIONMISSION

The central purpose and role of the Unemployment Insurance Fund is defined as:

Rendering an effective accessible service to all stakeholders

Being a sustainable organisation with sufficient reserves

Administering the Fund professionally


4

LEGISLATIVE MANDATESLEGISLATIVE MANDATES

Unemployment Insurance Act, 2001 as amended

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

The Act empowers the UIF to register all employers and employees in South Africa


5

Unemployment Insurance Contributions Act, 2002

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).

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).

These contributions are utilised to pay benefits and any other expenditure reasonably incurred relating to the application of this Act.


6

SUMMARY OF THE STRATEGIC OUTCOMES & SUMMARY OF THE STRATEGIC OUTCOMES & OBJECTIVESOBJECTIVES

Linking Service Delivery Outcomes to DoL Strategic Objectives and Fund’s Strategic Outcomes Government Service Delivery Outcomes

Unemployment Insurance Fund Strategic Outcome

Unemployment Insurance Fund Strategic Objective

Department of Labour Strategic Objectives

Strategic Outcome 1: Improved collection of revenue from employers

Strategic Objective 4: Encourage compliance through enhanced service delivery

KRA 5: Strengthening social protection

Strategic Outcome 2: Improved payment of benefits to beneficiaries of the Fund


KRA 5: Strengthening social protection

Strategic Objective 2: Improve Governance Strategic Objective 3: Strengthening the institutional capacity of the Fund

4. Decent employment through inclusive economic growth

Strategic Outcome 4: Effective administration of the Fund’s operations

Strategic Objective 5: Improve Stakeholder Relations

KRA 9: Strengthening the institutional capacity of the Department

5. Skilled and capable workforce to support an inclusive growth plan

Strategic Outcome 3: Participate in government initiatives of creating and sustaining decent employment

Strategic Objective 1: Fund Poverty Alleviation Schemes

KRA 1: Contribution to employment creation


7

STRATEGIC OUTCOMESSTRATEGIC OUTCOMES( what we wish to achieve i.e. impact)( what we wish to achieve i.e. impact)

Strategic Outcome 1

Improve collection of revenue from employers

Goal Statement

Increase contributions collected by at least a rate equal to the prevailing Consumer Price inflation index


8

STRATEGIC OUTCOMESSTRATEGIC OUTCOMES(( what we wish to achieve i.e. impact)what we wish to achieve i.e. impact)

Strategic Outcome 2

Improve payment of benefits to beneficiaries of the Fund

Goal Statement

Increase the rate of processing claims in order to pay within the targeted service levels and turnaround times.


9


Strategic Outcome 3

Participate in government initiatives of creating and sustaining decent employment

Goal Statement

Contribute in the various schemes designed to alleviate the harmful effects of unemployment which includes investing mandated funds in the Social Responsible Investments.


10


Strategic Outcome 4

Effective administration of the Fund’s operations

Goal Statement

Maintain effective systems of internal control as required by the Public Finance Management Act of 1999 (An unqualified audit opinion)


11

STRATEGIC OBJECTIVESSTRATEGIC OBJECTIVES( what we intend doing to achieve strategic outcomes)( 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.



Percentage of total mandated Social Responsible Investment invested

70% of the mandated Social Responsibility Investment invested by March 2012



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


12


Strategic Objective 2: Improve Governance


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



Combined Assurance

The approved annual plan executed by Internal Audit

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




13


Strategic Objective 2: Improve Governance (cont…)


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 1st phase of project according to the approved Project Plan and timeframes

Implement 2nd phase of project according to the approved Project Plan and timeframes

Implement 3rd 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




14


Strategic Objective 3: Strengthen Institutional Capacity of the Fund


Skills Development Enhanced

Staff developed as per the Workplace Skills Plan.

80% 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




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.


15


Strategic Objective 3: Strengthen Institutional Capacity of the Fund (cont…)


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 for ICT strategy approved by the Unemployment Insurance Fund’s management committee

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.


16




Improved client service

% 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

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

Technology to improve service delivery implemented

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.


17


Strategic Objective 4: Encourage compliance through enhanced service delivery(cont…)


Technology to improve service delivery implemented (cont..)

%increase on usage of U-Filing system

20% increase in Employers using U-Filing as compared to prior year by March 2012

20% increase in Employers using U-Filing as compared to prior year by March 2013

20% increase in Employers using U-Filing 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



Reduced Losses for the Fund

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


18


Strategic Objective 5: Improve Stakeholder Relation


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.



Diversified publications utilised.

Publication campaign to reach at least 16 million people according to GCIS/All Media Survey by March 2012



Strategic Alliances with relevant government entities and other stakeholders

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.

3 Additional MOUs signed by March 2014. Implementation Report to all governance structures on a quarterly basis.


19

UIF MTEF BUDGET FOR THE FINANCIAL YEAR 2011/12: ESTIMATED INCOME AND EXPENDITURE

BUDGET MTEF 2011/12- 2013/14BUDGET MTEF 2011/12- 2013/14

Revenue, Benefit expenditure , Reserves & Administration costs

Actual 2009/ 10

R’000

Revised Budget 2010/ 11

R’000

MTEF Budget 2011/ 12

R’000


R’000


R’000

UIF Contributions

10,759,020

11,404,552 12,202,871

13,057,072

13,971,067

Investment Income

3,415,322

2,850,635 3,185,417

3,488,209

3,729,617

Unemployment

4,536,397

4,583,914 5,243,998 5,999,134

6,863,009

Illness

231,834

414,090 473,718

541,934

619,972

Maternity

623,837

962,813 1,101,458 1,260,068

1,441,517

Adoption

656

1,628 1,862

2,131

2,437

Dependents

317,264

569,781 651,829

745,692

853,072

Benefit Payments

5,709,987

6,532,225 7,472,866

8,548,958

9,780,008

Lay-off schemes

200,000 400,000

400,000

200,000

Training and Social Plan Funding

4,140

200,000 210,200

220,000

250,000

Unemployment alleviating Schemes 4,140

400,000 610,200

620,000

450,000

ADMINISTRATIVE EXPENDITURE

846,861

1,305,689 1,305,404

1,320,682

1,393,768

NET SURPLUS

5,014,001

5,659,067 5,101,343

4,934,011

4,320,632


20

Budget assumptions for MTEF 2011/12

UIF Contributions 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 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 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 R6,5 billion, an increase of approximately 7% when compared to 2009/10 original budget (MTEF 2011/12 R7.5 billion, 2012/13 R8.5 billion and 2013/14 R9.8billion). The 2011/12 estimated value of benefit payable at R 7.5bn 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 Training Layoff Scheme R1.2 Billion ringfenced – Expenditure over next 4 years 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 DoL Public Employment Services R 200 Million budget over MTEF period increasing marginally with National Treasury CPI

Administration Expenditure 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%

BUDGET MTEF 2011/12- 2013/14BUDGET MTEF 2011/12- 2013/14


21

FUND POVERTY ALLEVIATION SCHEMS

Industrial Development Corporation (IDC) - R2 billion bond IDC drew down R1 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 R40 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 DoL/ DHET training lay-off scheme.

Social Responsible InvestmentThe 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 R35 billion

HIGHLIGHTS HIGHLIGHTS FOR THE YEAR TO DATE FOR THE YEAR TO DATE


22

Training and Social Plan FundingThe 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. Providing assistance to Productivity South Africa through allocation of funding to Social Plan

development. For the 2010/11 financial year R48 million has been committed. 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.



23

For the period ending January 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 R9,361 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%



24

For the period ending January 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 1 strategic plan & budget mtef period 2011/12-2013/14...

Documents

uif strategic plan mtef

skills development act

income tax act

south africa slide

fund goal statement

employers goal statement

terms of section

skills development levy