1 A Report on the implementation of the Mobility/Exit Mechanism for members of the SA National Defence Force, as well as related matters Prepared by the Directorate Human Resource Planning 13 Sept 05

2 Aim To inform the Portfolio Committee on Defence on the implementation of the Mobility/Exit Mechanism (MEM) for members of the SA National Defence Force and related matters

3 Scope Exit Mechanisms –Phase 1: Overview from 1994 to 2005 –Phase 2: Intended implementation period – FY 2005 to 2008 (MTEF) –Phase 3: Intent over the long term Service systems contract expiry Update on broad based representivity Utilisation of the Military Skills Development System Conclusion

4 Exit Mechanisms: Phase 1 Overview 1994 to 2005 –Downsizing/rightsizing origins Interim Constitution (Act 200 of 1993) Section 236(c) Consitution (Act 108 of 1996) Section 24(1) of Schedule 6 and Provisions of the Interim Constitution continued in force, Sections 236(1),(2),(3),(6) & (7)(b) & (8), 237(1) and 2(a) –Provisions aimed at the size and affordability of the DOD and informed the Defence Review of 1998 Envisaged compulsory employer-initiated retrenchment –Overtaken by the availability of the Voluntary Severance Package (VSP) (July 1996) and the Employer Initiated Package (EIP) The DOD steadily downsized towards , though natural attrition mainly –Rightsizing = E3 and R3

5 Exit Mechanisms: Phase 2 Legal basis –GEPF amended rules 14.8 and 20 –Approval by National Treasury –Minister of Defence (Section 55 of Defence Act [42 of 2002]) Intent of MEM –Tangible rightsizing progress –Execute realistic succession planning –Guard against the exodus of expertise/scarce skills –Advise members iro career progress as informed by the Transformation and Restructuring imperatives –Choice to accept/reject offer

6 Exit Mechanisms: Phase 2 (cont) Guidelines for Succession Planning iro MEM –Are functional groups/musterings constraint by critical shortages –Status of ETD and learner throughput –Maintenance of expertise –Contribution to rightsizing (MTEF & longer) –Contribution to race-rank distribution –“Old” Service System contract expiries and renewal justified –Succession planning: Role of Services and Divisions

7 Exit Mechanisms: Phase 2 (cont) Mobility/Exit Mechanism –MEM is intended to be implemented over a three-year period or longer –Flexibility in number of members who may be progressively identified –Maintain a balance between progressive rightsizing and the retention of critical skills –Tempo: Planned to allow for re-prioritising Defence Budget Realistic succession planning Successive planning for the MTEF planning and budgeting cycles

8 MOBILITY/ EXIT MECHANISM FOR SANDF MEMBERS Less than 10 years service and/or younger than 55 years of age 10 years pensionable service and 55 years or older GRATUITY & ANNUITY - NO SCALING DOWN OF PENSION BENEFIT RULE (b) - WITHOUT AN ADDITION OF PENSIONABLE SERVICE RULE (b) ACTUARIAL INTEREST RULE STATE GUARANTEE: Third party debts recovered from exit pay CONTRACTUAL OBLIGATIONS: Released PRO-RATA SERVICE BONUS LEAVE: Payment of leave credit RESETTLEMENT: Actual expenses MEDICAL PROVISION: Plus 10 years service, option to buy into RFMCF up to age 60, and eligible for medical service according to SAHMS provisions EXIT PAY: 2 weeks for every full year service, but a minimum of R payable OFFICIAL HOUSING: One month’s notice SUBSIDISED MOTOR VEHICLE SCHEMES RESKILLING: Maximum of R for reskilling, training for employment opportunities, and entrepreneurial skills MEM Pension Benefits ito GEPF Departmental Benefits

9 MEM Planning

10 MEM Planning (cont)

11 MEM Planning (cont)

12 MEM Planning (cont)

13 Intent over the long term: post 2008 Phase 3 Difficult to forecast the exact rightsizing results Identified members may decline offers to exit Members with high potential may apply and be considered for an offer to exit A degree of fluidity throughout the implementation of the MEM is expected Continuous (monthly) monitoring of progress Representations to Government may be made should the implementation of the MEM over the MTEF period not significantly contribute to rightsizing

14 13 (3.7%) Service Systems Contract Expiry 171 (48.8%) 36 (10.2%) 130 (37.1%) Total 350

15 DOD Race Composition As at 15 August

16 Gen Lt Gen Maj Gen Brig Gen Col Lt Col Maj Capt LT 2LT Cpln WO1 WO2 SSgt Sgt Cpl L/Cpl PTE Def Rev SANDF’S Race Composition per Rank as at 15 August % (1) 5 (71%)2 (29%) 28 (65%)15 (35%) 70 (42%)95 (58%) 263 (31%)589 (69%) 544 (31%)1 210 (69%) 1076 (47%)1 235 (53%) (55%)1 197 (45%) (73%)421 (26%) 322 (76%)102 (24%) 96 (74%)34 (26%) 643 (26%)1 795 (74%) (44%)1 436 (56%) (60%)2 204 (40%) (80%)1 642 (20%) (93%) (95%) (96%) 706 (7%) 270 (5%) 662 (4%) 76% Black (African, Coloured & Indian)24% White 4 (9%) 54 (33%) 376 (44%) 77 (44%) 657 (28%) 537 (20%) (49%) 793 (31%) 839 (15%) -438 (-5%) (-18%) -994 (-20%) (-21%) 24 (1%) 1 (1%) Deviation 1 %

(13%) 7 (100%) 83% Male17% Female 1 (100%) (87%) 43 (100%) 153 (93%) 12 (7%) 738 (87%)114 (13%) (81%)325 (19%) (73%)617 (27%) (63%)967 (37%) (69%)488 (31%) 240 (57%)184 (43%) 117 (90%) 13 (10%) (86%)333 (14%) (83%)444 (17%) (80%)1 079 (20%) (82%)1 493(18%) (85%)1 437 (15%) (85%)762 (15%) Gen Lt Gen Maj Gen Brig Gen Col Lt Col Maj Capt LT 2LT Cpln WO1 WO2 SSgt Sgt Cpl L/Cpl PTE Macro Gender SANDF Gender Distribution per Rank – 15 August 05 Deviation 1%

18 MSDS Intakes & Projection Jan 2006 Intake SA Army – SA Air Force -196 SA Navy – 600 SA Medical Health Service -196

19 Regular Force PTE’s Aged between 18 and 24 years old

20 MSDS Projected Long Term Planning Table Note: Projected Regular Force Strength is out of total DOD Strength.

21 MSDS HR Race Composition Compared MSDS Race Composition DOD Race Composition As at 15 August 05 Total Strength Total Strength

22 MSDS HR Gender Composition Compared Total Strength: Total Strength:

23 Total Strength: As at 15 August 2005 Service System Composition

24 Conclusion Until now, HR rightsizing efforts have been unsatisfactory Depending on progress to rightsize via the MEM, compulsory exits may need to be decided upon later SANDF is on a steady path to migrate from FSS to NSS MEM should contribute to a more balanced demographic composition SANDF will maintain rejuvenation tempo (effect analysis survey)

25 Discussion and questions