1. Prepared by the Chief of Human Resources, DOD 13 November 2007
Briefing to the Portfolio Committee on Defence on the Mobility/Exit Mechanism for Members of the SA National Defence Force and the Employee Initiated Severance Package for Public Service Act Personnel
Prepared by the Chief of Human Resources, DOD
13 November 2007

2. Aim
To brief the Portfolio Committee on Defence on the implementation of the Mobility/Exit Mechanism (MEM) for members of the SA National Defence Force and the Employee Initiated Severance Package (EISP) for Public Service Act Personnel (PSAP)

3. Scope Exit Mechanisms Conclusion
Implementation of the MEM for SANDF members and EISP for PSAP
Analysis of the Impact of Implementation of the MEM and EISP
Conclusion

4. Exit Mechanisms: MEM Legal basis Intent of MEM
GEPF Rule 14.8 and 20 amended
Approved by National Treasury
Minister of Defence approved 5 Jul 05 (ito Section 55 of Defence Act [42 of 2002]) (Introduced wef 12 July 2005)
Intent of MEM
Should lead to a tangible rightsizing progress
Execute through 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 – MEM is voluntary

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

6. Exit Mechanisms: EISP
Minister of PSA determination introduced the EISP wef 1 Jan 06
Ito Section 3(3)(c), Public Service Act, 1994
DOD introduced the EISP wef 31 May 06
EISP Benefits Structure
Pension beenfits ito the Gov Employees Pension Law, 1996
Departmental benefits ito the Implementation Measures
EISP Application
Employees initiate their separation via the EISP

7. MEM for SANDF Members: Benefit Structure
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

8. EISP for PSAP Employees: Benefit Structure
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
EISP
Pension Benefits ito GEPF
Departmental Benefits
MEDICAL: 55 yrs & older qualify for post-retirement medical assistance:
Less 10 yrs equal 12 times employer contribution
10 to 15 yrs equal to 36 times employer contribution
15 yrs plus 2/3rd employer contribution per month
STATE GUARANTEE: Third party debts recovered from exit pay
CONTRACTUAL OBLIGATIONS: Released
LEAVE: Payment of leave credit
RESETTLEMENT: Actual expenses, 55 yrs & older compensated according to PSCBC Resolution 3 of 99 & Departmental Policies
EXIT PAY: 2 weeks for every full year service, but a minimum of R payable
OFFICIAL HOUSING: One month notice
SUBSIDISED MOTOR VEHICLE SCHEMES
RESKILLING: Maximum of R for reskilling, training for employment opportunities, and entrepreneurial skills
PRO-RATA SERVICE BONUS

9. MEM as at 07 November 2007: Approved by Minister of Defence
Race and Gender

10. EISP as at 07 November 2007: Approved by Minister of Defence
Race and Gender

11. MEM as at 07 November 2007: Approved by Minister of Defence
Age Group

12. EISP as at 07 November 2007: Approved by Minister of Defence
Age Group

13. MEM AND EISP as at 07 November 2007: Approved by Minister of Defence
Fin year and Budget Holder

14. Exit per reason other than Exit Mechanism
Termination Type
2005/06FY
2006/07FY
Contract Expired
500
1 023
Deceased
864
780
Departmental Transfer
281
830
Discharged
319
194
Medical Discharged
104
142
Resigned
1 319
1 104
Retired
350
312
Total
3 737
4 385
Note: FY 2005/06: MEM/EISP = 12,8% of total exits
FY 2006/07: MEM/EISP = 18,7% of total exits

15. Conclusion
Steady results are being achieved on stated objectives eg representivity and age profiles with the implementation of the MEM
37,6% of all exits are in the rank group Col, Lt Col, WO1 and WO2
26,9% of all exits are white males in the rank group Col, Lt Col, WO1 and WO2
71,2% of all exits are White
Difficult to forecast the exact rightsizing results as MEM/EISP are voluntary
The tempo of implementation for both the MEM and EISP determines their success in the DOD
Continuous (monthly) monitoring of progress
Continued emphasis on succession planning efforts ito the MEM application

16. DISCUSSION/QUESTIONS