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Presentation to the Portfolio Committee of Labour October 2009 Unemployment Insurance Fund

Presentation to the Portfolio Committee of Labour October 2009 Unemployment Insurance Fund. Structure of Presentation. Introduction/Objectives of the Presentation Key issues ( Achievements and Challenges) 2.1 Governance 2.2 Financial Performance 2.3 Operational Performance

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Presentation to the Portfolio Committee of Labour October 2009 Unemployment Insurance Fund

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  1. Presentation to the Portfolio Committee of Labour October 2009 Unemployment Insurance Fund

  2. Structure of Presentation • Introduction/Objectives of the Presentation • Key issues ( Achievements and Challenges) • 2.1 Governance • 2.2 Financial Performance • 2.3 Operational Performance • 2.4 Stakeholders • 2.5 People Management • 2.6 Social Security • 2.7 Response to current economic meltdown • 2.8 Improvements in benefits • 2.9 Audit Issues • 3. Strategic objectives 2009/10 • 4. Conclusion

  3. Governance • The year 2008/9 was another success in obtaining an unqualified audit opinion/report from the Office of the Auditor General. This is the fourth time in succession from 2005/6. Attention is now accorded to improve service delivery to our broader clients. • Compliance to legislations and policies has been the cornerstone of our operations and we continue to improve. • We have worked closely with the Executive Authority and the UIF Board in addressing the strategic intent and challenges. We have also welcome the new Board in this current year and the good work continues. • Despite the economic turmoil, the Fund is able to weather the storm and pay close attention to the service delivery complaints observed. • Actuarial valuations by end of March 2009 indicate that the Fund is in a sound financial position.

  4. Financial Performance • Despite the economic meltdown, the Fund managed to collect R 10.3 billion compared to R 9.1 billion ( 2007/8) • Total value of assets increased from R 27.8 billion (2007/8) to R 37 billion • Investment revenue increased from R 2.1 billion (2007/8) to R 3.4 billion • Surplus increased from R 6.8 billion to (2007/8) to R9.2 billion

  5. Summary of financial performance

  6. Operational Performance • The Fund has 1.2 million employers ( commercial, domestic and taxi) registered on the system. Taxi sector has been slow in registering with the Fund. Classification of employers

  7. Operational Performance • The Fund has 7.6 million registered employees ( commercial, domestic and taxi). Classification of employees

  8. Operational Performance • The rapid deterioration in global financial markets and an increase in unemployment in South Africa saw a growing demand for unemployment benefits. The Fund paid an amount of R 3.8 billion in benefits against the R 2.9 billion of last year • The Fund received 627,244 claims which is an increase of almost 100 000 more claims than in 2008/2009. A total of 610,736 of these claims were approved during this period reflecting an approval rate of 97%. This is broken down in the table below.

  9. Summary of Benefit payments

  10. Summary – No. of people/clients who received benefit

  11. Stakeholders • As part of stakeholder relations, the Fund participated in eleven exhibitions across the country. Furthermore, it participated in four government Izimbizo programmes in Mpumalanga, Limpopo, Free State and Gauteng. • The Fund undertook an intensive marketing and advertising drive through the SABC. The campaign involved outdoor broadcasting campaign undertaken in the following provinces. West Cape (George) Mpumalanga (Lephalale) Limpopo KwaZulu-Natal Gauteng ( Ga-Rankuwa and Soweto)

  12. People Management • Head Office – by end of March 2009, the Fund had 439 posts, 380 ( 87% ) filled with a vacancy of 59 (13%) posts • In terms of Employment equity, the statistics reflect 59% women and 41% males. • The Fund values its human capital and strives to continuously develop its staff. In 2008/9, the Fund : • Continue to train and develop all staff. Trained officials on more than thirty (30) training initiatives/courses. • 9 officials were enrolled and trained on ABET programme • 10 Interns were placed on internship programme

  13. Social Security Reform • As part of the process of the social security reforms in the country, the Fund participated in the debates and planning processes of the social security reforms. • A number of research papers were produced and presented by the Fund to the Interdepartmental Task Team on Social Security A paper on wage subsidy A paper on institutional arrangement on comprehensive social security A paper on Improvements of unemployment insurance system in South Africa

  14. Response to economic meltdown Training of the unemployed    • The Fund is working with DoL and SETAs on a pilot project to train unemployed beneficiaries. This pilot project is up and running in Gauteng South and Gauteng North is busy finalising its project plan. R 40 million set aside for this project Training Layoffs • The Fund contributed R 1.2 billion to the project dealing with the training of the layoffs. A training layoff schemeis aimed at companies that are in distress due to economic situation

  15. Audit Issues • The Fund obtained an unqualified audit opinion/report in 2008/9 • Management and Office of the Auditor General had a workshop on the 20 -21 August 2009. Management Actions were develop to address few issues raised by AG. • Updates are done on a monthly basis and Audit Matrix is a subject matter for the Audit Committee/Board etc • Auditor General will start the early audit (interim) in Nov 2009 • Verification of implementation of management actions by Risk Unit - Compliance Section is scheduled for October 2009 • There is substantial progress on implementation of management actions.

  16. Improvements in benefits • Internal processes have started to amend the legislation ( Unemployment Insurance Act) to improve the benefits. It is envisaged that the internal process will be finalised before year end and the next financial year would be dedicated for NEDLAC and parliamentary processes. • The intention is increase the benefit to our claimants through regulations.

  17. Strategic objectives 2009/10 • STRATEGIC PRIORITY: Speeding up economic growth and transforming the economy to create decent and sustainable livelihoods • STRATEGIC GOAL 1 • RE-INTEGRATE UNEMPLOYED WORKERS BACK INTO LABOUR MARKET • The fund will train unemployed contributors to prepare them to re-enter the labour market.

  18. Strategic priority 1 • STRATEGIC GOAL 2 • ASSIST IN JOB CREATION • The Fund will invest about 5% of its total portfolio in projects that have employment creation as an objective.

  19. Build cohesive, caring and sustainable communities • STRATEGIC GOAL 3 • RESTRUCTURE THE UIF BENEFITS AND COVERAGE • The Fund will, in conjunction with social partners, amend legislation to improve both benefits and coverage. • The fund will investigate the increase of benefit days from 238 to 365

  20. Intensify the fight against crime and corruption. • STRATEGIC GOAL 4 • COMBAT THE SCOURGE OF FRAUD AND CORRUPTION • The fund will revise both the fraud prevention strategy as well as the risk management strategy.

  21. Building a developmental state including improvement of public services and strengthening democratic institutions • STRATEGIC GOAL 5 • IMPROVE CAPACITY AND EFFICACY OF THE FUND • The Fund will Endeavour to close the skills gap, reduce vacancy rate to 3% and ensure that all officials sign a performance agreement and they are assessed twice a year • STRATEGIC GOAL 6 • IMPROVE SERVICE DELIVERY • The fund will increase compliance by employers • The fund will clean the database and ensure that it is up to date. • Decentralisation of claims processing will also take priority.

  22. STRATEGIC GOAL 6IMPROVE SERVICE DELIVERY • Reduce paperwork by scanning all registration and claims documents. • Increase the number of registered Taxi operators. • Extend claims processing functions to certain employers. • STRATEGIC GOAL 7 • IMPROVE REVENUE INFLOWS • Increase revenue inflows by CPI • Increase overpayment recovery. • STRATEGIC GOAL 8 • IMPROVE CUSTOMER AWARENESS AND SATISFACTION • Develop and implement a communication plan.

  23. Conclusion • The Fund has appreciated the tenable successes and acknowledged some of the challenges facing the organisation and we continue in our strides to address these challenges. • The current economic recession pose a service delivery challenge to the Fund in terms of claims turnaround time. We are putting capacity to address the demand. Created a balance of models to cater for both good and bad economic conditions. • The Fund has enough reserves to fight the current storm of high retrenchments.

  24. Thank you

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