STRATEGIC PLAN & BUDGET MTEF PERIOD 2011/12-2013/14 Unemployment Insurance Fund

1. STRATEGIC PLAN & BUDGET MTEF PERIOD 2011/12-2013/14 Unemployment Insurance Fund UIF STRATEGIC PLAN MTEF 2011-2014

2. VISION The Unemployment Insurance Fund strives to contribute to the alleviation of poverty in South Africa by providing effective short term unemployment insurance to all workers who qualify for unemployment and related benefits UIF STRATEGIC PLAN MTEF 2011-2014

3. MISSION The central purpose and role of the Unemployment Insurance Fund is defined as: • Rendering an effective accessible service to all stakeholders • Being a sustainable organisation with sufficient reserves • Administering the Fund professionally UIF STRATEGIC PLAN MTEF 2011-2014

4. LEGISLATIVE MANDATES Unemployment Insurance Act, 2001 as amended • The Unemployment Insurance Fund (UIF) was established in terms of section 4(1) of the Unemployment Insurance Act, 2001 (Act 63 of 2001) as amended • The Act empowers the UIF to register all employers and employees in South Africa UIF STRATEGIC PLAN MTEF 2011-2014

5. Unemployment Insurance Contributions Act, 2002 • Section 8 of the Act empowers the SARS Commissioner to collect monthly contributions from both employers and workers who are required to register as employers in terms of the fourth schedule to the Income Tax Act and who are liable for the payment of the skills development levy in terms of the Skills Development Act, 1999 (Act 9 of 1999). • Section 9 of the Act empowers the Unemployment Insurance Commissioner to collect contributions from all those employers who are not required to register as employers in terms of the fourth schedule to the Income Tax Act and who are not liable for the payment of the skills development levy in terms of the Skills Development Act, 1999 (Act 9 of 1999). • These contributions are utilised to pay benefits and any other expenditure reasonably incurred relating to the application of this Act. UIF STRATEGIC PLAN MTEF 2011-2014

6. SUMMARY OF THE STRATEGIC OUTCOMES & OBJECTIVES UIF STRATEGIC PLAN MTEF 2011-2014

7. STRATEGIC OUTCOMES( what we wish to achieve i.e. impact) Strategic Outcome 1 UIF STRATEGIC PLAN MTEF 2011-2014

8. STRATEGIC OUTCOMES(what we wish to achieve i.e. impact) Strategic Outcome 2 UIF STRATEGIC PLAN MTEF 2011-2014

9. STRATEGIC OUTCOMES( what we wish to achieve i.e. impact) Strategic Outcome 3 UIF STRATEGIC PLAN MTEF 2011-2014

10. STRATEGIC OUTCOMES( what we wish to achieve i.e. impact) Strategic Outcome 4 UIF STRATEGIC PLAN MTEF 2011-2014

11. Strategic Objective 1: Fund Poverty Alleviation Schemes STRATEGIC OBJECTIVES( what we intend doing to achieve strategic outcomes) UIF STRATEGIC PLAN MTEF 2011-2014

12. Strategic Objective 2: Improve Governance STRATEGIC OBJECTIVES( what we intend doing to achieve strategic outcomes) UIF STRATEGIC PLAN MTEF 2011-2014

13. Strategic Objective 2: Improve Governance(cont…) STRATEGIC OBJECTIVES( what we intend doing to achieve strategic outcomes) UIF STRATEGIC PLAN MTEF 2011-2014

14. Strategic Objective 3: Strengthen Institutional Capacity of the Fund STRATEGIC OBJECTIVES( what we intend doing to achieve strategic outcomes) UIF STRATEGIC PLAN MTEF 2011-2014

15. Strategic Objective 3: Strengthen Institutional Capacity of the Fund(cont…) STRATEGIC OBJECTIVES( what we intend doing to achieve strategic outcomes) UIF STRATEGIC PLAN MTEF 2011-2014

16. Strategic Objective 4: Encourage compliance through enhanced service delivery STRATEGIC OBJECTIVES( what we intend doing to achieve strategic outcomes) UIF STRATEGIC PLAN MTEF 2011-2014

17. Strategic Objective 4: Encourage compliance through enhanced service delivery(cont…) STRATEGIC OBJECTIVES( what we intend doing to achieve strategic outcomes) UIF STRATEGIC PLAN MTEF 2011-2014

18. Strategic Objective 5: Improve Stakeholder Relation STRATEGIC OBJECTIVES( what we intend doing to achieve strategic outcomes) UIF STRATEGIC PLAN MTEF 2011-2014

19. BUDGET MTEF 2011/12- 2013/14 • UIF MTEF BUDGET FOR THE FINANCIAL YEAR 2011/12: ESTIMATED INCOME AND EXPENDITURE UIF STRATEGIC PLAN MTEF 2011-2014

20. Budget assumptions for MTEF 2011/12 UIF Contributions The contribution revenue projection at a rate of 7% as supplied by the Funds Actuaries is aligned with expectations of marginal economic recovery and subdued job creation including improved compliance. Investment Income The Funds investment income decline with 16% based on the current investment portfolio maturity profile and declining interest rates. The investment income is estimated to show a growth of 12% from the prior year lower base, increase in the portfolio based on the deposit of the Funds budgeted surpluses and expected increase in interest rates over the longer term. Benefit Payments Total benefits expenditure is based on the Actuarial year-end valuation report as at 31 March 2010. The revised estimated value of benefit payable for 2010/11 is R6,5 billion, an increase of approximately 7% when compared to 2009/10 original budget (MTEF 2011/12 R7.5 billion, 2012/13 R8.5 billion and 2013/14 R9.8billion). The 2011/12 estimated value of benefit payable at R 7.5bn is 14.40% higher than 2010/11 revised budget based on expected growth due to salary increases and additional claims due to improved awareness and economic conditions. Unemployment alleviate Schemes Training Layoff Scheme R1.2 Billion ringfenced – Expenditure over next 4 years Training of the Unemployed Schemes – Reintegrate the unemployed in to the workplace - Productivity SA, Mining Quality Agency, SETA projects, Training pilot project in cooperation with DoL Public Employment Services R 200 Million budget over MTEF period increasing marginally with National Treasury CPI Administration Expenditure The total administrative expenditure represents 9.06% of total revenue and 11.45% of contributions revenue and 9.98% of contribution revenue by 2013/2014. This is based on a very conservative revenue growth budget of 7% BUDGET MTEF 2011/12- 2013/14 UIF STRATEGIC PLAN MTEF 2011-2014

21. FUND POVERTY ALLEVIATION SCHEMS Industrial Development Corporation (IDC) - R2 billion bond IDC drew down R1 billion these funds are available to start up businesses, to provide a debt portion of expansionary acquisitions for existing businesses and to facilitate working capital funded expansions. Based on approved business plan funding to date there is a possibility to create 9 355 jobs and save 5 365 jobs. Training Layoff Scheme R 1.2 Billion (Budget over the MTEF period) The improvement of the schemes benefitsto 6 months were concurred to by the Minister of Labour and the Minister of Higher Education and Training. Jointly an amount of R40 million was spent towards alleviating the effects of recession. As a result of this programme, 19 companies and 6 351 workers were assisted through the DoL/ DHET training lay-off scheme. Social Responsible Investment The has invested 68 per cent of its Investment portfolio in Central Government, Municipals and Parastatal bonds and money market instruments that support infrastructure projects that will create and sustain jobs.This is an investment of R35 billion HIGHLIGHTS FOR THE YEAR TO DATE UIF STRATEGIC PLAN MTEF 2011-2014

22. Training and Social Plan Funding The UIF has taken further steps by setting aside R 1 billion over the 2009/10 – 2013/14 MTEF period for schemes aimed at re-integrating unemployed UI beneficiaries back into employment. Providing assistance to Productivity South Africa through allocation of funding to Social Plan development. For the 2010/11 financial year R48 million has been committed. Accelerated Artisan Training Programme (AATP) pilot that enrolled a total of 324 candidates are in its finalisation stages. STENGHTEN INSTITUTIONAL CAPICITY Vacancy rate The UIF has achieved 6% vacancy rate and HRM is in the process of filling the remaining 27 vacancies. HIGHLIGHTS FOR THE YEAR TO DATE UIF STRATEGIC PLAN MTEF 2011-2014

23. ENCOURAGE COMPLIANCE THROUGH ENHANCED SERVICE DEILVERY Unemployment Benefits The fund paid benefits to 693 000 beneficiaries a total amount of R 4.9 billion experienced a very slight decrease in unemployment benefit payments compared to the same period in the year 2009/10. Increased Revenue Inflows Contribution Revenue collected for the period ending January 2011 was R9,361 billion that is 4.36% up against prior year Improve number of employers using U-filing up to January 2011 Active Employers increased with 24 759 and increased of 62% on prior year. Reduced losses for the Fund Collect at least 15% of the outstanding balance of benefits paid in error recovery for the period ending January 20100 amounted to R 46,027 million an increased of 36% For the period ending January HIGHLIGHTS FOR THE YEAR TO DATE UIF STRATEGIC PLAN MTEF 2011-2014

24. IMPROVE STAKEHOLDER RELATIONS Communication campaigns and publications UIF continue to market the Fund through media coverage and engagements with stakeholders as a way to improve the compliance rate. Briefing sessions were organized, national road shows were held with taxi associations to educate them about the services offered by the Fund. 160 000 Z - folders were produced for U-filing system, fraud & risk pamphlets and posters were distributed to increase awareness to employers of the new U-Filing system. The UIF Communication section constantly work with GCIS on the branding and marketing of the UIF service offerings and compliance requirements through television radio and printed media. For the period ending January HIGHLIGHTS FOR THE YEAR TO DATE UIF STRATEGIC PLAN MTEF 2011-2014