UIF STRATEGIC PLAN MTEF 2011-2014
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STRATEGIC PLAN & BUDGETMTEF PERIOD 2011/12-2013/14
Unemployment Insurance Fund
STRATEGIC PLAN & BUDGETMTEF PERIOD 2011/12-2013/14
Unemployment Insurance Fund
UIF STRATEGIC PLAN MTEF 2011-2014
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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
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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
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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
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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.
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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
Strategic Objective 4: Encourage compliance through enhanced service delivery
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
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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
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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.
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STRATEGIC OUTCOMESSTRATEGIC OUTCOMES( what we wish to achieve i.e. impact)( what we wish to achieve i.e. impact)
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.
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STRATEGIC OUTCOMESSTRATEGIC OUTCOMES( what we wish to achieve i.e. impact)( what we wish to achieve i.e. impact)
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)
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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.
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
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STRATEGIC OBJECTIVESSTRATEGIC OBJECTIVES( what we intend doing to achieve strategic outcomes)( 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 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
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
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STRATEGIC OBJECTIVESSTRATEGIC OBJECTIVES( what we intend doing to achieve strategic outcomes)( 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
Provide quarterly strategic risk monitoring reports within 30 days after the end of each quarter to the Unemployment Insurance Commissioner
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
90% of cases received or detected finalised by year end
90% of cases received or detected finalised by year end
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STRATEGIC OBJECTIVESSTRATEGIC OBJECTIVES( what we intend doing to achieve strategic outcomes)( 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
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.
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STRATEGIC OBJECTIVESSTRATEGIC OBJECTIVES( what we intend doing to achieve strategic outcomes)( 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 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.
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STRATEGIC OBJECTIVESSTRATEGIC OBJECTIVES( what we intend doing to achieve strategic outcomes)( what we intend doing to achieve strategic outcomes)
Strategic Objective 4: Encourage compliance through enhanced service delivery
Output Performance Indicators 2011/12 2012/13 2013/14
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.
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STRATEGIC OBJECTIVESSTRATEGIC OBJECTIVES( what we intend doing to achieve strategic outcomes)( what we intend doing to achieve strategic outcomes)
Strategic Objective 4: Encourage compliance through enhanced service delivery(cont…)
Output Performance Indicators 2011/12 2012/13 2013/14
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
CPI % increase as compared to previous year by March 2013
CPI % increase as compared to previous year by March 2014
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
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STRATEGIC OBJECTIVESSTRATEGIC OBJECTIVES( what we intend doing to achieve strategic outcomes)( 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
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.
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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
MTEF Budget 2012/ 13
R’000
MTEF Budget 2013/ 14
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
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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
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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
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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.
HIGHLIGHTS HIGHLIGHTS FOR THE YEAR TO DATE FOR THE YEAR TO DATE
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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%
HIGHLIGHTS HIGHLIGHTS FOR THE YEAR TO DATE FOR THE YEAR TO DATE
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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.
HIGHLIGHTS HIGHLIGHTS FOR THE YEAR TO DATE FOR THE YEAR TO DATE