1. Presentation to the Portfolio Committee of Labour 19 March 2010
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 Response to current economic meltdown
2.5 Improvements in benefits
3. Strategic objectives 2009/10 to 2012/13
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 (2007/8) to R9.2 billion

5. Summary of financial performance
31 March 2008
(R‘000)
31 March 2009
Increase/
decrease
Contributions
9,164,632
10,
Investment income
2,187,789 3,
Benefits expenditure
2,921,460 3,
Net surplus
6,866,959 9,
Investments
26,864,188
37,
Technical reserves
9,911,180
11,
Accumulated surplus
15,430,562
23,
Total assets
27,823,800

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
Commercial
Domestic
Taxi
Total
5516 1,

7. Operational Performance
The Fund has 7.6 million registered employees ( commercial, domestic and taxi).
Classification of employees
Commercial
Domestic
Taxi
Total 6,
5643 7,

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
For the first nine months of 2009/10, the Fund has paid R4.4 billion (unaudited) in benefits.
The Fund received 627,244 claims which is an increase of almost 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%.
The number of claims for the first nine months of 2009/10 is received and were approved. The approval rate remains 97%

9. 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 scheme is aimed at companies that are in distress due to economic situation

10. 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 finalized before year end and the next financial year would be dedicated for NEDLAC and parliamentary processes.
The intention is to increase the income replacement rate and extend the benefit duration from 238 to 365 days. Actuaries are busy evaluating these options for financial viability.

11. STRATEGIC GOAL 1 RE-INTEGRATE UNEMPLOYED WORKERS BACK INTO LABOUR MARKET
Division
Objective
Indicator
Target 09/10
Target 10/11
Target 11/12
Target 12/13
Target 13/14
UIC
Design and implement schemes tore-integrate the unemployed into employment.
Number of unemployed persons on the UIF database participating in the scheme
200 UIF beneficiaries in the scheme
800 UIF beneficiaries in the scheme
1200 UIF beneficiaries in the scheme
2000 UIF beneficiaries in the scheme
BUDGET
(R’000)
Unemployment Training
R40 000 R R R R
Internal Audit
Review the adequacy and effectiveness of internal control, risk management and governance process
Execution of the approved annual plan by the Audit Committee
Issue all final report by the end of the year
Issue progress quarterly report to the Audit Committee
R’000
Consulting Internal Audit
R4 000
R3 000
R3 5000

12. STRATEGIC GOAL 2 ASSIST IN JOB CREATION
Division
Objective
Indicator
Target09/10
Target 10/11
Target 11/12
Target 12/13
Target 13/14
UIC
Invest in job creation projects
% of total investment invested in Social Responsible Investment
90% Mandated SRI Investments invested in direct SRI
1% increase in SRI Investments
1% Increase in SRI Investments
Issue all final report by the end of the year
BUDGET
No direct budget R

13. STRATEGIC GOAL 3 RESTRUCTURE THE UIF BENEFITS AND COVERAGE
Division
Objective
Indicator
Target09/10
Target 10/11
Target 11/12
Target 12/13
Target 13/14
Support Services
Amend Legislation
UI Amendment Bill
Finalize UI Amendment Bill
Bill tabled in Parliament at the end of second quarter
BUDGET
R’000
No direct budget R
Improve benefits and coverage
Increase benefits and cover excluded workers
Finalize research
Increase Income Replacement Ratio
Coverage extended to public service and informal sector workers.
Extend benefits days to 365 days
Projects
R1 000
R2 300 R0

14. STRATEGIC GOAL 3 RESTRUCTURE THE UIF BENEFITS AND COVERAGE
Division
Objective
Indicator
Target09/10
Target 10/11
Target 11/12
Target 12/13
Target 13/14
Support Services
Improve corporate governance
Revised charters/terms of reference for Board and Committees
Revise current charters/terms of reference and implement
Monitor and evaluate implementation
Develop and implement facilities management program
Finalize facilities management projects and upgrades
Finalize upgrade of head office
Finalize upgrade of Midrand Building
Maintain buildings
Implement maintenance program
BUDGET
No direct budget R

15. STRATEGIC GOAL 4 COMBAT THE SCOURGE OF FRAUD AND CORRUPTION
Division
Objective
Indicator
Target09/10
Target 10/11
Target 11/12
Target 12/13
Target 13/14
Risk management
Revise and implement fraud prevention strategy
Conduct risk assessment
Comprehensive fraud risk assessment conducted
Reduce fraud opportunities
Implementation and monitoring of management actions plans
Reduce fraud opportunities risks by at least 15%
Reduce fraud opportunities risks by at least 30%
Reduce fraud opportunities risks by at least 40%
Improve the detection of fraud
Implementation of Data analysis system
Data analysis on declarations
Data analysis on declarations and contribution
Data analysis on declarations, contribution and payments
Data analysis on industry
BUDGET
Projects
R1 000
R1 051
R1 099 R
% of cases finalized
80% of cases received
82% of cases received/detected are finalized
85%of cases received/detected are finalized
Revise and implement Risk Management Strategy
Implementation of the risk strategy
Strategic risk assessment conducted and response plan implemented

16. STRATEGIC GOAL 5 IMPROVE CAPACITY AND EFFICACY OF THE FUND
Division
Objective
Indicator
Target09/10
Target 10/11
Target 11/12
Target 12/13
Target 13/14
HRM
Close skills gap
% Workplace Skills Plan implemented
75% of Workplace Skills Plan
80%
Maintenance of the establishment.
%Vacancy rate
11% vacancy rate
6% vacancy rate
5% vacancy rate
3% vacancy rate
Maintenance of the establishment
Design organizational Structures.
Approved Organizational Structure
Finalize and implement provincial structures
Finalize and implement head office structure
Implement Performance Management System.
% Compliance to performance management policy
95% Compliance
96% Compliance
BUDGET
No direct budget R

17. STRATEGIC GOAL 5 IMPROVE CAPACITY AND EFFICACY OF THE FUND
Division
Objective
Indicator
Target09/10
Target 10/11
Target 11/12
Target 12/13
Target 13/14
Promote Sound Labour Relations.
% of Grievances addressed within 30 days of receipt
80%
90%
95%
% of Disciplinary cases addressed within 60 days of receipt
CIO
Build Internal ICT capacity.
ICT structure in place and implemented.
Create ICT structure and obtain approval.
Implement approved ICT structure
Understudy PPP resources.
Build Internal ICT capacity
Manage the PPP contract
Enterprise Resources Planning (F1) implemented.
Implementation of the Financial system by end of March 2010.
Stabilization of the Financial System
Enhancement of the Financial system
BUDGET
No direct budget R

18. STRATEGIC GOAL 6 IMPROVE SERVICE DELIVERY
Division
Objective
Indicator
Target09/10
Target 10/11
Target 11/12
Target 12/13
Target 13/14
Operations
Improve compliance on declarations.
% of claims finalized within 5 weeks
70% finalized within five weeks
80% finalized within five weeks
85% finalized within five weeks
90% finalized within five weeks
95% finalized within five weeks
BUDGET
Projects
R0.5
R1 500
R2 000
R2 500 R
Data cleansing
Finalize database analysis
Finalize analysis by end of March SAPO validate all addresses
Address short-comings.
R10 345
R12 345
Validate addresses
Validate all employer addresses
Validate all new employer addresses
Project Data Cleansing

19. STRATEGIC GOAL 6 IMPROVE SERVICE DELIVERY
Division
Objective
Indicator
Target09/10
Target 10/11
Target 11/12
Target 12/13
Target 13/14
Data management
% Increase on usage of the u-Filing system
20% Increase in employers using u-Filing
BUDGET
Communications Budget R
Adobe Air implemented
Pilot with at least 1000 employers
Extend project to 20% manual declarers
Increase to cover at least 50% of employers declaring manually
Increase to cover at least 60% of employers declaring manually
Call Centre Project

20. STRATEGIC GOAL 6 IMPROVE SERVICE DELIVERY
Division
Objective
Indicator
Target09/10
Target 10/11
Target 11/12
Target 12/13
Target 13/14
Decentralize claims processing functions
Number of processing centres.
A total of 71 processing centres
A total of 76 processing centres
BUDGET
Projects
R0.5
R3 000
R 3 500
R3 700 R
Improve document accessibility and document management.
% of registrations and claims documents scanned.
50% of registration, declarations, claims and related documents scanned
Finalize the backlog
90% of registration and declarations documents scanned
90% of registration and declaration documents scanned
R2 700
R2 900
R1 000

21. STRATEGIC GOAL 6 IMPROVE SERVICE DELIVERY
Division
Objective
Indicator
Target09/10
Target 10/11
Target 11/12
Target 12/13
Target 13/14
% of registration declaration, declaration and claim documents
90%
BUDGET
Projects
R3 700
R3 750
R3 800
R2 850 R
Increase number of registered employers
% Increase in number of registered employers
10% of Taxi sector employers increased as compared to previous year
30% increase in Taxi registrations as compared to previous year
50% increase in Taxi registrations as compared to previous year
60% as compared to previous year
70% as compared to previous year
No direct budget
UIC
Extend claims processing capacity to employers
Number of employers participating in the scheme
10 employers to participate in proof of concepts.
20 employers participating
1000 employers participating.
2000 employers participating
3000 employers participating
Call centre Projects
R10 000
R1 000
R2 000

22. STRATEGIC GOAL 7 IMPROVE REVENUE INFLOWS
Division
Objective
Indicator
Target09/10
Target 10/11
Target 11/12
Target 12/13
Target 13/14
Finance
Increase revenue from UIF employers
% Increase of revenue from UIF employers
CPI% Increase as compared to previous year.
CPI% Increase as compared to previous year
BUDGET
Project debt Collection and SAP R
Increase rand value of overpayment recoveries.
% Increase of overpayment recovery.
Collect 15% of outstanding balance of overpayments.
Collect 15% of outstanding balance of overpayments
R15 000
R7 000
R5 000

23. STRATEGIC GOAL 8 IMPROVE CUSTOMER AWARENESS AND SATISFACTION
Division
Objective
Indicator
Target09/10
Target 10/11
Target 11/12
Target 12/13
Target 13/14
Communication
Develop communication plan
Communication plan is in place
End of quarter one
BUDGET
Advertising R
Advertise and market services of the Fund
Potential audience reached
5 million
15 million
20 million
21 million
22 million
Improve client awareness and satisfaction
Client awareness and satisfaction survey
Survey finalized by end of March 2010
% improvement on awareness and satisfaction
10% improvement from last survey
20% improvement from last survey
40% improvement from last survey
60% improvement from last survey

24. EMPLOYEE COSTS NO OF POSTS [JUNE 2009 PERSAL]
OFFICE
FILLED
VACANT
TOTAL
New 100% UII
100%
Splits
Vacant Posts
Filled + Vacant
UIF HQ
421 19
440
DOL HQ
114 68
182
DOL Provinces
4243
363 44
663
1070
5313
4778 63
731
1157
5935

25. EMPLOYEE COST Expenditure Medium term Estimate Item Original Budget
Revised Budget
R’ Million
2009/10
2010/11
2011/12
2012/13
Salaries and Wages
Employer Contributions
544
134
479
119
553
164
586
174
619
184
TOTAL
678
598
717
760
803

26. INCOME AND EXPENDITURE ESTIMATES BY STANDARD ITEMS
Medium term
Estimate
Item
Original Budget
Revised Budget
R’ million
2009/10
2010/11
2011/12
2012/2013
Income
Reserves
Transfer payments
Unemployment Schemes
Personnel costs
Administration costs
Decentralization G & S
Capital Assets
Consulting services
Projects
Roll -overs
-13,235
1,259
3,817 40
678
604 10 13 79 -
-13,381
1,360
5,619
1,240
598
632 30 29
-13,329
875
6,100
200
717
690 11 31 47 52
-14,449
1,008
6,954
210
760
725 12 44 32
-15,636
1,229
7,928
220
803
758 42
Surplus
-6,737
-3,823
-4,6060
-4,693
-4,602

27. REVENUE INCOME ESTIMATES
Medium term
estimate
Item
Original Budget
Revised Budget
R’ million
2009/10
2010/11
2011/12
2012/13
Contributions
-10,410
-9,768
-10,256
-10,769

28. OTHER INCOME ESTIMATES
Medium term
Estimate
Item
Original Budget
Revised Budget
R’ million
2009/10
2010/11
2011/12
2012/2013
Rent received
Penalties Received - SARS
Interest income from banks
Interest from SARS debtors 2 53 34 30 60 47 48 35 49
TOTAL
119
142
144
145
147

29. INVESTMENT INCOME Income Medium term Estimate Item Original Budget
Revised Budget
R’ million
2009/10
2009/2010
2010/11
2011/12
2012/2013
Interest from investments
2,706
2,829
3,417
4,048
4,720

30. RESERVES CHANGE IN OUTSTANDING CLAIMS RESERVES
Medium term
Income
Estimate
Item
Original budget
Revised budget
R’ Million
2009/10
2010/11
2011/12
2012/13
Change in Unearned Contribution Reserved
Change in outstanding claims reserve
964
295
1,041
319
670
205
771
236
941
288
TOTAL
1,259
1,360
875
1,008
1,229

31. BENEFIT EXPENDITURE Expenditure Medium term estimate Item
Original Budget
Revised Budget
R’ Million
2009/10
2010/11
2011/12
2012/13
Unemployment
Illness
Maternity
Adoption
Dependants
2,678
242
563 1
333
3,943
356
828
490
4,281
387
899 2
532
4,880
441
1025
607
5,563
503
1168
691
Benefits Payments
3,817
5,619
6,100
6,954
7,928

32. OTHER EXPENDITURE EXPENDITURE ESTIMATES BY STANDARD ITEMS
Medium term
Estimate
Item
Original Budget
Revised Budget
R’ Million
2009/10
2010/11
2011/12
2012/13
Personnel
Administrative
Decentralization: Good & Services
Capital assets
Consultant Services
Projects
678
603 10 13 79
598
632 30 40 29
717
690 11 31 47 52
760
725 12 44 32
802
758 42
Rollovers -
TOTAL
1,383
1,339
1,548
1,584
1,657

33. 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.