Acting Director- General: Mr Les Kettledas PRESENTATION TO PORTFOLIO COMMITTEE 18 March 2008 Acting Director- General: Mr Les Kettledas

Index I. Unemployment Insurance Fund II. Compensation Fund

Unemployment Insurance Fund STRATEGIC PLAN & MTEF BUDGET 2008-2011

Presentation outline Part C Part D Part A Part B Overview Strategic Perspective Part B Strategic Outputs for 2008/09 Part C Performance Review Part D Budget information Strategic Priorities

Part A: Overview

Overview Core function Main products Administration The collection of contributions and the provision of short term cash benefit on a monthly cycle to registered workers that become unemployed. Main products Unemployment benefit Illness benefit Maternity Adoption benefit Dependants benefit Administration UIA No 63 of 2001 - Administration UCA No 4 of 2002 - Collection

UIF Strategic Perspective Vision Mission Objectives

Vision To be a sustainable organisation providing effective short term financial relief to qualifying contributors & their dependents Mission To provide short-term insurance benefits to qualifying contributors through; Effective and efficient administration; Ensuring accessibility of services to all stakeholders

4 balanced Strategic Objectives Financial: To obtain clean audit opinion Stakeholders: To increase stakeholder awareness and support of the Fund People: To recruit and retain competent staff Processes: To enhance the quality of service to our clients

Part B Strategic Outputs for 2008/09

Medium Term Output Targets Clean audit opinion Improve contribution collection from employers Improve compliance by employers Reduction of losses to the Fund Improve financial and operations management and reporting Increase stakeholder awareness and support for the Fund Entrench UIF as a safety net against unemployment hardships Educate stakeholders about their rights and obligations Build relationships with stakeholders Recruit and retain competent and caring staff Develop a multi-skilled and competent workforce Recruit and retain competent staff Develop and implement a succession plan Enhance quality of service to our clients Optimal use of technology. Define and automate processes Improve operational efficiency Enhance IT systems

Part C: PERFORMANCE REVIEW 2007/08 PERFORMANCE REVIEW ACHIEVEMENTS

2007/08 STRATEGIC REVIEW 4 STRATEGIC PRIORITIES ADOPTED Investment in infrastructure to boost service delivery Improve financial sustainability of the Fund Building a sound institution based on good governance Increase emphasis on performance management not just finance

2007/08 REVIEW : Achievements Investment in infrastructure to boost service delivery Document management system implemented Awareness campaign reaching 20+ million

2007/08 : Achievements Improve financial sustainability of the Fund 2006/07 CHANGE CONTR. INCOME 6 685 381 5 861 405 823 976 TOTAL ASSETS 26 006 975 18 960 940 7 046 035 SURPLUS 4 497 765 2 999 342 1 498 423

2007/08 : Achievements Building a sound institution based on good governance Implemented Risk management strategy and function Corporate governance framework

2007/08 : Achievements Increase emphasis on performance management : EMPLOYERS 2007/08 2006/07 Change Domestic 554 197 531 106 23 091 Commercial 586 442 513 409 73 033 Taxi 4 836 3 015 1 821 Total 1 145 475 1 047 530 97 945

2007/08 : Achievements Increase emphasis on performance management : EMPLOYEES 2007/08 2006/07 CHANGE DOMESTIC 632 492 628 362 4 132 COMMERCIAL 6 716 066 6 587 977 128 089 TAXI 5 413 4 782 631 TOTAL 7 353 971 7 221 121 132 852

2007/08 : Achievements Increase emphasis on performance management: BENEFITS 2007/08 R’000 2006/07 Change Unemploy. 1 509 855 1 530 404 (20 549) Illness 140 020 135 788 4 232 Maternity 345 140 308 223 36 917 Adoption 585 588 (3) dependent 180 815 192 236 (11 421)

2007/08 : Achievements HUMAN RESOURCES MANAGEMENT AFR.M 5 38.9 6 54.5 EMPLOYMENT EQUITY SR 13 TO 15: 12 POSTS NUM.T %. T CUR.N CUR.% AFR.M 5 38.9 6 54.5 AFR.F 4 36.9 2 18.2 COL.M 1.4 COL.F 1.7 IND.M 1.5 1 9.1 IND.F 1.3 WHI.M 8.9 WHI.F 9.4

2007/08 : Achievements HUMAN RESOURCES MANAGEMENT NUM.T %. T CUR.N EMPLOYMENT EQUITY SR 9 TO 12: 74 POSTS 62 FILLED NUM.T %. T CUR.N CUR.% AFR.M 29 38.9 18 AFR.F 27 36.9 21 33.9 COL.M 1 1.4 3 4.8 COL.F 1.7 IND.M 1.5 IND.F 1.3 1.6 WHI.M 7 8.9 WHI.F 9.4 12 19.4

Part D: Budget Information MTEF Budget 2008 Strategic priorities

Economic classification: MTEF 2008 Staff costs R’000 Goods & Services Other Benefits Revenue 2007/08 403 000 447 717 71 000 3 913 000 10 087 000 2008/09 481 000 550 646 11 000 3 717 000 11 342 000 2009/10 507 000 582 661 3 200 4 252 000 12 463 000 2010/11 536 000 617 317 3 300 4 865 000 13 663 000

MTEF 2008 GROWTH TRENDS: SURPLUS - OVER R16 bn OVER 3YRS Total MTEF growth in Rand (bn) Surplus 2007/08 3.82 2008/09 5.33 2009/10 5.91 2010/11 5.75

MTEF GROWTH TRENDS REVENUE – year on year + 11% MTEF 2008 growth trend in Rand (bn) Revenue increase 2007/08 10.087 2008/09 11.342 +1.255 2009/10 12.463 +1.121 2010/11 13.663 +1.200

MTEF GROWTH TRENDS BENEFITS & RESERVES – Rands (bn) BENEFIT RESERVES (yr) 2007/08 3.9 1.4 2008/09 3.7 1.2 2009/10 4.3 1.2 2010/11 4.9 1.9 Average benefit growth of 14% per year. Actuary sourced estimates.

MTEF GROWTH TRENDS ADMIN EXPENDITURE: Average 9% over 3 years MTEF 2008 Admin growth in Rands (m) Admin Increase 2007/08 945 2008/09 1,114 +169 2009/10 1,137 + 23 2010/11 1,200 + 63

MTEF 2008: GROWTH IN SUPPORT OF STRATEGIC PRIORITIES Enhancing quality of service to our clients – Reducing paper trail through development of IT solutions Implement updated standard operating guide Improve benefit value to clients Input to social security review forum Obtaining clean audit report - improving revenue management: Implement Debt & Compliance Management strategy: compulsory declarations

MTEF 2008: GROWTH IN SUPPORT OF STRATEGIC PRIORITIES Obtaining clean audit report - improving revenue management: Improve debt collection through outsourcing of debt collection services and application for court orders. Increase stakeholder awareness and support: Advocacy & awareness campaigns through Media campaigns Stakeholder meetings Promotional material Obtaining clean audit report – Curbing fraudulent transactions – Implement bank verification strategy.

MTEF 2008: GROWTH IN SUPPORT OF STRATEGIC PRIORITIES Recruiting and retaining competent staff by providing resources for Training & workshops facilities Bursaries Learnerships Implementation of a work place skills plan Enhance quality of service to clients through the optimal use of technology by: continuously maintaining and enhancing the Fund’s management systems Undertaking a special project to improve the quality of the Fund’s declaration database Implementing an integrated management information system for siyaya

Benefit Improvement - impact on surplus: R1.9bn over three years Proposal under consideration: Impact of Change of IRR from a minimum 38% to 45% and a maximum 60% to 65% on estimated surpluses: 2008/09 R544m 2009/10 R622m 2010/11 R713m Assuming claim expenditure will increase on average by 14.66%

Financial achievements as at 31 December 2007 YTD 07/08 (R‘000) YTD 06/07 % Change Increase/ decrease Contributions 6,743,224 5,911,226 14 Investment income 1,291,481 767,991 68 Other income 1,634 1,008 62 Benefits expenditure 2,176,415 2,167,237 0.4 Operating expenditure 267,910 264,182 1 Staff cost 212,985 235,418 10 Net surplus 4,497,765 2,999,342 50 Investments 24,691,649 17,826,987 39 Technical reserves 11,590,807 10,405,748 11 Acc surplus 14,274,646 8,330,713 71 Total assets 26,006,975 18,960,940 37

Financial achievements as at 31 December 2007: Budget vs Actuals December YTD 2007/08 (R‘000) Budget YTD 2006/07 Variance (R’000) % Over/ Under Contributions 6,743,224 6,553,239 189,985 3 Investment income 1,291,481 1,032,980 258,501 25 Other income 1,634 1,024 610 60 Benefits expenditure 2,176,415 2,934,894 (758,479) 26 Operating expenditure 267,910 392,886 (124,976) 32 Staff cost 212,985 307,356 (94,371) 31 Net surplus 4,497,765 2,876,862 1,620,903 56

COMPENSATION FOR CCUPATIONAL INJURIES AND DISEASES ACT, 130 OF 1993 AS AMENDED (COIDA)

VISION AND MISSION MISSION To provide compensation for occupational injuries, diseases and the rehabilitation of employees and deliver continuous value to all stakeholders

VISION AND MISSION VISION To develop and implement solutions to provide quality and accessible services according to standards as set in consultation with stakeholders, whilst maintaining the Fund’s liquidity.

STRATEGIC OBJECTIVES Efficient social safety net Financial viability of the Fund ensured Effective cash and investments management Management reforms and restructuring of the Fund are effected Enhance quality and access to COIDA services and information Effective data and information management ensured

SPECIFIC OUTPUTS-(2007/08) Reforming Management and restructuring the Fund through the following initiatives; Establishing an automated Integrated claims and revenue management system Refocusing the fund for better service delivery Developing and implementing an advocacy, communication and marketing strategy Improving turn-around time for claims settlement Improving collection and access to services

ACHIEVEMENTS 84% Reduction in backlog claims New imaging system Implemented Elimination of cheque payment method Improvement in Revenue Collection Communication Strategy in place

CHALLENGES The following strategic outputs were not achieved in the reporting year; Policy on Early Return to Work not finalised Claims Turn-Around time still remains a challenge Slow progress in the implementation of IT hampers our finalisation of the Integrated claims and revenue Systems

FINANCIAL INFORMATION FEB 2008 2007/08 R’000 2006/07 Variance % Contributions revenue 3,336,907,301 2,579,469,438 22.7 Investment income 556,102,560 470,330,516 15.4 Other income 11,854,528 12,570,631 (-5.6) Benefits paid 2,016,713,837 2,374,316,893 (-15.1) Admin 313,420,910 463,733,456 (-32.4) Surplus 1,820,279,668 355,058,219 55.5 Investments 16,480,639 ,000 15,142,223,000 17.8

FINANCIAL INFORMATION CONTINUED…. Benefits No. of claims paid No. of payments made Amount MEDICAL 543,449 886,511 1,430,143,788 COMPENSATION 324,627 331,672 655,543,479 TOTAL 868,076 1,218,183 2,085,687,267

STATISTICS ON CLAIMS OPENED SINCE 2000 TO OCTOBER 2007 YEAR OPENED ACCEPTED % REPUDIATED PAYMENTS 2000 237605 188208 79 2217 168821 89.6 2001 274635 224046 82 4047 198035 88.39 2002 249702 213106 85 4270 187649 88.05 2003 233660 203167 87 3730 180097 88.64 2004 220576 188703 86 2810 163545 86.66 2005 246841 211179 68 2698 182461 86.40 2006 216584 168082 78 1442 144983 86.25 2007 182723 117272 64 1040 82757 70.56 TOTAL 1862326 1513763 81 22254 1308348 86.43

MEDICAL PAYMENTS BY FEBRUARY 2008

NUMBER OF MEDICAL ACCOUNTS PAID BY FEBRUARY 2008

TTD PAYMENTS BY FEBRUARY 2008

TTD PAYMENT TOTALS BY FEBRUARY 2008

NUMBER OF PENSION PAYMENTS BY FEBRUARY 2008

TTD PAYMENTS BY FEBRUARY 2008

PD LUMP SUM PAYMENTS BY FEB 2008

PRIORITIES FOR 2008/09 Consolidating the EFT Payments Improving Collections Improving the Claims Turn-around time Development of Funds Information System Addressing the Human Capacity Challenge

MTEF- BUDGET FOR 2008/09-2010/11 Total Revenue Surplus/Deficit Account\ 2007/2008 2008/2009 2009/2010 2010/2011 Description Budget Forecast Total Assessment Income 3,030,474 3,240,809 3,435,257 3,641,372 Total Other Income 1,287,146 1,353,962 1,433,736 1,519,761 Total Revenue 4,317,620 4,594,771 4,868,993 5,161,133 Current Expenses 433,249 501,120 502,825 527,261 Transfers and Subsidies 2,338,775 2,671,113 2,831,381 3,001,263 Total Expenses 2,772,024 3,172,233 3,334,206 3,528,524 Surplus/Deficit 1,545,596 1,422,538 1,534,787 1,632,609

CONCLUSION We project a marginal inflationary increase of 7% on revenue over the period We also project an average 12% increase in Claims due rising medical costs Significant growth of 13% on Compensation to employees due to the engagement of contract workers

Thank you