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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 A Overview Strategic Perspective - PowerPoint PPT Presentation
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1
PRESENTATION TOPORTFOLIO COMMITTEE
Acting Director- General: Mr Les Kettledas
18 March 2008
2
Index
I. Unemployment Insurance Fund
II. Compensation Fund
3
I. Unemployment Insurance Fund
STRATEGIC PLAN & MTEF BUDGET 2008-2011
4
Presentation outline
• Part A– Overview– Strategic Perspective
• Part B– Strategic Outputs for 2008/09
• Part C– Performance Review
• Part D– Budget information– Strategic Priorities
5
Part A: Overview
6
Overview• Core function
– 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
7
UIF Strategic Perspective
• Vision
• Mission
• Objectives
8
VisionTo be a sustainable organisation providing effective short term financial relief to qualifying contributors & their dependents
MissionTo provide short-term insurance benefits to qualifying contributors through;
• Effective and efficient administration;• Ensuring accessibility of services to all stakeholders
9
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
10
Part B Strategic Outputs for 2008/09
11
Medium Term Output Targets1. 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
2. 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
3. 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
4. Enhance quality of service to our clients– Optimal use of technology. Define and automate processes– Improve operational efficiency– Enhance IT systems
12
Part C: PERFORMANCE REVIEW
2007/08 PERFORMANCE REVIEW
ACHIEVEMENTS
13
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
14
2007/08 REVIEW : Achievements
• Investment in infrastructure to boost service delivery– Document management system implemented– Awareness campaign reaching 20+ million
15
2007/08 : Achievements
• Improve financial sustainability of the Fund
2007/08
R’000
2006/07
R’000
CHANGE
R’000
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
16
2007/08 : Achievements
• Building a sound institution based on good governance
– Implemented– Risk management strategy and function– Corporate governance framework
17
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
18
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 631TOTAL 7 353 971 7 221 121 132 852
19
2007/08 : Achievements
• Increase emphasis on performance management: BENEFITS
2007/08
R’000
2006/07
R’000
Change
R’000
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)
20
2007/08 : Achievements• HUMAN RESOURCES MANAGEMENT• 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 0 1.4 0 0
COL.F 0 1.7 0 0
IND.M 0 1.5 1 9.1
IND.F 0 1.3 0 0
WHI.M 1 8.9 2 18.2
WHI.F 1 9.4 0 0
21
2007/08 : Achievements• HUMAN RESOURCES MANAGEMENT• EMPLOYMENT EQUITY SR 9 TO 12: 74 POSTS 62
FILLED
NUM.T %. T CUR.N CUR.%AFR.M 29 38.9 18 29
AFR.F 27 36.9 21 33.9
COL.M 1 1.4 3 4.8
COL.F 1 1.7 3 4.8
IND.M 1 1.5 3 4.8
IND.F 1 1.3 1 1.6
WHI.M 7 8.9 1 1.6
WHI.F 7 9.4 12 19.4
22
Part D: Budget Information
• MTEF Budget 2008
• Strategic priorities
23
Economic classification: MTEF 2008Staff costs
R’000
Goods & Services
R’000
Other
R’000
Benefits
R’000
Revenue
R’000
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
24
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
25
MTEF GROWTH TRENDSREVENUE – 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
26
MTEF GROWTH TRENDSBENEFITS & 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.
27
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
28
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
29
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.
30
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
31
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%
32
Financial achievements as at Financial achievements as at 31 December 200731 December 2007
December
YTD 07/08
(R‘000)
December
YTD 06/07
(R‘000)
% 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
33
Financial achievements as at Financial achievements as at 31 December 2007: 31 December 2007: Budget vs ActualsBudget vs Actuals
December YTD
2007/08
(R‘000)
Budget
YTD
2006/07
(R‘000)
Variance
(R’000)
Variance
%
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
34
II. COMPENSATION FOR CCUPATIONALINJURIES AND DISEASES ACT, 130 OF 1993 AS AMENDED (COIDA)
35
VISION AND MISSION
• MISSION
To provide compensation for occupational injuries, diseases and the rehabilitation of employees and deliver continuous value to all stakeholders
36
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.
37
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
38
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 deliveryDeveloping and implementing an advocacy,
communication and marketing strategyImproving turn-around time for claims settlementImproving collection and access to services
39
ACHIEVEMENTS
• 84% Reduction in backlog claims
• New imaging system Implemented
• Elimination of cheque payment method
• Improvement in Revenue Collection
• Communication Strategy in place
40
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
41
FINANCIAL INFORMATION
FEB 20082007/082007/08
R’000R’000
2006/072006/07
R’000R’000
VarianceVariance
%%
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
42
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
43
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
44
MEDICAL PAYMENTS BY FEBRUARY 2008
Medical payment amountsR
1,326,350,503
R 1,152,944,094
R 1,050,000,000
R 1,100,000,000
R 1,150,000,000
R 1,200,000,000
R 1,250,000,000
R 1,300,000,000
R 1,350,000,000
Years 2006 2007
Am
ou
nts
pa
id
45
NUMBER OF MEDICAL ACCOUNTS PAID BY FEBRUARY 2008
MIS Medical payments stats
820345707644
0
200000
400000
600000
800000
1000000
Years 2006 2007
Nu
mb
er
of
pa
ym
en
ts
46
TTD PAYMENTS BY FEBRUARY 2008
MIS claims stats for 2007
37110
42540
34000
36000
38000
40000
42000
44000
TTD TTD
2006 2007
Years
Nu
mb
er
of
pa
ym
en
ts
47
TTD PAYMENT TOTALS BY FEBRUARY 2008
TTD payment amounts for 2007
R 108,322,326
R 97,472,467
R 92,000,000R 94,000,000
R 96,000,000R 98,000,000
R 100,000,000
R 102,000,000R 104,000,000R 106,000,000
R 108,000,000R 110,000,000
TTD TTD
Year 2006 2007
Am
ou
nts
pa
id
48
NUMBER OF PENSION PAYMENTS BY FEBRUARY 2008
PD pensions 2007
71222
73812
69000
70000
71000
72000
73000
74000
75000
Years 2006 2007
Nu
mb
er
of
pa
ym
en
ts
49
TTD PAYMENTS BY FEBRUARY 2008
MIS claims stats for 2007
37110
42540
34000
36000
38000
40000
42000
44000
TTD TTD
2006 2007
Years
Nu
mb
er
of
pa
ym
en
ts
50
PD LUMP SUM PAYMENTS BY FEB 2008
MIS-PD amounts paid
R 57,922,873
125,797,710
R 0
R 50,000,000
R 100,000,000
R 150,000,000
Years 2006 2007
Ao
un
ts p
aid
51
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
52
Account\ 2007/2008 2008/2009 2009/2010 2010/2011
Description Budget Budget Forecast 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
MTEF- BUDGET FOR 2008/09-2010/11
53
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
54
Thank you
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