1. PRESENTATION TO THE MEDIA ON THE COMMISSION’S RECOMMENDATIONS - 2008/2009 THE INDEPENDENT COMMISSION FOR THE REMUNERATION OF PUBLIC OFFICE BEARERS DATE:15 OCTOBER 2008 VENUE: UNION BUILDING

2. Composition of the Commission Chairperson, Deputy Chairperson and 6 part time Commissioners and its Secretariat Public Office Bearers Executive / Legislatures / Local Government / Traditional Leaders / Judges / Magistrates Legislative Mandate Section 219 of Chapter 13 of the Constitution; The Independent Commission for The Remuneration of Public Office Bearers Act, 1997 (Act 92 of 1997), as amended; Section 8 (4) and (5) of the Independent Commission for the Remuneration of Public Office Bearers Act, 1997, to make annual recommendations relating to the salaries, benefits and allowances, as well as the resources required by different categories of defined public office bearers ; The Remuneration of Public Office Bearers Act, 1998 (Act 20 of 1998), as amended. COMPOSITION, PUBLIC OFFICE BEARERS & LEGISLATIVE MANDATE

3. LEVEL EXECUTIVE AUTHORITY LEGISLATIVE AUTHORITY JUDICIAL AUTHORITY TRADITIONAL LEADERS NationalPresident Deputy President Minister Deputy Minister National Assembly National Council of Provinces Chief Justice Deputy Chief Justice President of Supreme Court of Appeal Judge of Constitutional Court Deputy President of Supreme Court of Appeal Judge of Supreme Court of Appeal NHTL –Chairperson: NHTL –Deputy Chairperson: NHTL –Member of NHTL ProvincialPremier Member of Executive Council Provincial LegislatureJudge President of the High Court Deputy Judge President of the High Court Judge of the High Court President of the Divorce Court Presiding Officer of the Divorce Court PHTL –Chairperson: PHTL –Deputy Chairperson: PHTL –Member: PHTL LocalExecutive Mayor Deputy Executive Mayor Mayor Deputy Mayor Member of Executive Council Member of Mayoral Council Municipal CouncilSpecial Grade Chief Magistrate Regional Court President Chief Magistrate Regional Magistrate Senior Magistrate Magistrate Traditional Leaders –King –Senior Traditional Leader –Headman PUBLIC OFFICE BEARER POSITIONS

4. TOOLS OF TRADE TOTAL REMUNERATION ALLOWANCES BENEFITS BASE PAY STRUCTURE MARCH 2007 APRIL 2008 2009 OCTOBER 2008 TOOLS OF TRADE UNDERLYING PRINCIPLES JOB PROFILES GRADING BENCH MARKING TOTAL REMUNE- RATION STRUCTURE PENSION BENEFITS MEDICAL AID BENEFITS COLA OUTGOING PRESIDENT MARCH 2007 REPORT THE REVIEW PROCESS REVISED BENEFITS/ ALLOWANCES / COLA APRIL 2008 REPORT OCTOBER 2008 REVISED PENSION BENEFITS REVISED ALLOWANCES REVISED COLA

5.  The need for a Review  Review Methodology (3-year project) Four Stages  Job Evaluation of positions Structured Interviews  Job Grading into appropriate grades Expert grading by Consultants  Benchmarking positions Private Sector Public Sector State Owned Enterprises International Comparatives  Fixing Remuneration levels Conceptualization and component design of positions Pay level determination  Final Report Draft Report Publication for Comment Stakeholder Road shows Statutory consultations Consider inputs Final report FIRST MAJOR REVIEW – MARCH 2007

6. FIRST REVIEW REPORT MARCH 2007 Activities Remuneration philosophy statement Job profiles Grading structure Benchmarking Remuneration and benefits base pay structure STAKEHOLDER INPUT AND ENGAGEMENT Activities Direct consultations with POB on pension, medical aid benefits and tools of trade Written submissions received from POB Costing of submissions and proposals on pension and medical aid only Research on tools of trade is ongoing RECORDAL, COSTING AND ANALYSIS OF EXISTING BENEFITS Activities Collect and collate pension and medical aid benefits of all POB Actuarial costing of existing pension and medical aid benefits of POB Analysis of adequacy of existing benefits BENEFIT DESIGN AND COSTING Activities Consider pension and medical aid benefit options Pension and medical aid benefit design Costing of proposed pension and medical aid benefits received from stakeholders SECOND REVIEW REPORT APRIL 2008 Activities Draft report Further stakeholder engagements Statutory consultations Consider final input on pension, medical aid benefits and tools of trade Publish report Outcome: Basis for determina- tion of benefits and tools of trade in a total remuneration framework Outcome: Evaluation and costing of stakeholder expectations Outcome: Baseline for benefits design phase Outcome: Fair, transparent and accountable benefits and tools of trade practice Outcome: Fair, justifiable and transparent total remuneration structure and tools of trade for all public office bearers in South Africa SECOND REVIEW METHODOLOGY – APRIL 2008

7. SECOND REVIEW RECOMMENDATIONS – APRIL 2008 NATIONAL EXECUTIVE, NATIONAL PARLIAMENT AND PROVINCIAL LEGISLATURES Defined contribution (POBPF) + defined benefit (ASB) 34.5% state contribution + ASB to be increased by 20% monthly for each member Benefit design to have a maximum benefit of 92.5% pensionable salary TRADITIONAL LEADERS No pension recommendations – Traditional Leadership positions terminate at death therefore pension cannot be recommended Pension recommendations – members of National & Provincial Houses upon exit LOCAL GOVERNMENT Currently (MCPF) defined contribution applicable. No recommendations made No proposals received JUDGES No recommendations made No pension fund exists for judges. (Unfunded defined benefit – benefits paid by South African National Treasury) No Pension recommendations MAGISTRATES No recommendations made. Current benefits (GEPF) applicable MEDICAL AID / ALLOWANCES / COLA NB: TOOLS OF TRADE REVIEW STILL IN PROGRESS No changes recommended. Current benefits (PARMED) applicable Section 8(1)(d) allowance 7.5% COLA on existing and recommended salary Employer funded medical aid contributions for members of Houses (through salary increases) (PARMED). 7.5% COLA on existing and recommended salary No recommendations made No proposals received. 7.5% COLA on existing and recommended salary No recommendations made Current benefits (PARMED) applicable. 7.5% COLA on existing and recommended salary. No recommendations made Current benefits (GEMS) applicable 7.5% COLA on existing and recommended salary PENSION BENEFITS

8. DECISION MAKING REQUIRED – 2008  Commission is empowered to make recommendations in terms of the Constitution and National legislation;  After Commission has made recommendations it conducts statutory consultations with the Chief Justice, Minister of Finance and Minister of Justice and Constitutional Development;  Commission delivers its recommendations to the President and the Speaker of Parliament and simultaneously gazettes its recommendations;  The President determines salaries, allowances and benefits of POB taking into consideration the Commission’s recommendations;  After the President has determined the remuneration of POB, Parliament must take a resolution approving the President’s determination in relation to Judges and Magistrates and Parliament must by resolution determined the remuneration of the President taking into consideration the recommendations of the Commission;  Commission embarked on a major review of POB remuneration and made recommendations contained in the First and Second Review Reports in March 2007 and April 2008 respectively;

9. DECISION MAKING REQUIRED – 2008  During 2007 and 2008 the President requested advice from the Commission on First and Second Review Reports by referring POB submissions back to the Commission;  No determination was made by the President in 2007 except for inflation related cost of living adjustments;  The Commission also considered afresh the referrals by the President regarding the recommendations of Second Review Report of 2008;  The Commission supplements its recommendations in its Second Review Report of 2008 by recommending its revised recommendations of October 2008;  A Government Notice setting out revised recommendations will be published in the Government Gazette on 15 October 2008;  POB have waited for two years and no determinations by the President or approval by Parliament on the major review of the Commission ensued.

10.  On 5 September 2008, the Commission met to consider the fresh representations referred to it by the President and having considered all the relevant circumstances, resolved not to change its recommendations in the First and Second Review Reports, except in the following respects: a)By adjusting the remuneration levels recommended in the First Review Report by a CPIX of 11% per annum with effect from 1 April 2008 instead of the 7,5% per annum that was used in the calculations in the Second Review Report published in the Gazette of 17 April 2008. b)By recommending a once-off gratuity or terminal benefit in the following terms: i)A member of Parliament or of the provincial legislature who has served a period of 5 years or less should not be entitled to a pension but rather to a once-off terminal payment equal to 45% of pensionable salary for every year of service; ii)A member of Parliament or of the provincial legislature who has served more than 5 years and whose term of office has ended be entitled to a once-off gratuity equal to 4 months pensionable salary for every 5 years of service or a pro-rata part of the 5 year period; and REVISED RECOMMENDATIONS – OCTOBER 2008

11. c)By recommending that the allowance provided for in section 8(1)(d) of the Income Tax Act, 1962 be increased from R40 000 per annum to R120 000 per annum in relation to every member of Parliament or of a Provincial Legislature.  The Commission has revised its recommendations on remuneration of public office bearers to be found in the First Review Report by proposing inflation based increase from 7.5% (that was recommended in the Second Review Report) to 11%.  In view of the above considerations, the Commission recommends a general percentile increase in salaries, allowances and benefits for all public office bearers from 7.5% recommended in the Second Review Report to 11% per annum with effect from 01 April 2008.  The Commission recommends that all municipal councils be entitled to the allowance permitted by section 8(1)(d) of the Income Tax Act, 1962 of R120 000 per annum.

12. TABLE 37 REVISED REMUNERATION LEVELS PROPOSED IN THE FIRST AND SECOND REVIEW REPORTS AND ADJUSTED BY 11% WITH EFFECT FROM 1 APRIL 2008 NATIONAL EXECUTIVE AND DEPUTY MINISTERS GRADE PAY LEVEL POSITION TOTAL REMUNERATION RECOMMENDED 1 APRIL 2007 PROPOSED TOTAL REMUNERATION 1 APRIL 2008 EA1President1,898,4002,107,224 EB1Deputy President1,708,6001,896,546 EC1Minister1,452,3001,612,053 ED1Deputy Minister1,196,0001,327,560

13. TABLE 38 REVISED REMUNERATION LEVELS PROPOSED IN THE FIRST AND SECOND REVIEW REPORTS AND ADJUSTED BY 11% WITH EFFECT FROM 1 APRIL 2008 NATIONAL PARLIAMENT GRADE PAY LEVEL POSITION TOTAL REMUNERATION RECOMMENDED 1 APRIL 2007 PROPOSED TOTAL REMUNERATION 1 APRIL 2008 PA1Speaker: National Assembly1,708,6001,896,546 Chairperson: NCOP1,708,6001,896,546 PB1Deputy Speaker: National Assembly1,196,0001,327,560 Deputy Chairperson: NCOP1,196,0001,327,560 2House Chairperson1,110,6001,232,766 PC1Chief Whip: Majority Party939,7001,043,067 Chief Whip: NCOP939,7001,043,067 Parliamentary Counsellor: President939,7001,043,067 Parliamentary Counsellor: Deputy President939,7001,043,067 Leader of Opposition939,7001,043,067 2Chairperson of a Committee854,300948,273 PD1Deputy Chief Whip: Majority Party768,900853,479 Chief Whip: Largest Minority Party768,900853,479 Leader of a Minority Party768,900853,479 2Whip713,500791,985 PE1Member: National Assembly643,800714,618 Permanent Delegate: NCOP643,800714,618

14. TABLE 39 REVISED REMUNERATION LEVELS PROPOSED IN THE FIRST AND SECOND REVIEW REPORTS AND ADJUSTED BY 11% WITH EFFECT FROM 1 APRIL 2008 PROVINCIAL EXECUTIVES AND LEGISLATURES GRADE PAY LEVEL POSITION TOTAL REMUNERATION RECOMMENDED 1 APRIL 2007 PROPOSED TOTAL REMUNERATION 1 APRIL 2008 LA1Premier1,366,9001,517,259 LB1Member of Executive Council1,196,0001,327,560 Speaker1,196,0001,327,560 LC1Deputy Speaker939,7001,043,067 2Chairperson of Committees768,900853,479 Chief Whip: Majority Party768,900853,479 Leader of Opposition768,900853,479 3Deputy Chairperson of Committees723,400802,974 Chairperson of a Committee723,400802,974 Deputy Chief Whip: Majority Party723,400802,974 Chief Whip: Largest Minority Party723,400802,974 Leader of a Minority Party723,400802,974 LD1Parliamentary Counsellor to a King643,800714,618 Whip643,800714,618 2Member of Provincial Legislature623,100691,641

15. TABLE 40 REVISED REMUNERATION LEVELS PROPOSED IN THE FIRST AND SECOND REVIEW REPORTS AND ADJUSTED BY 11% WITH EFFECT FROM 1 APRIL 2008 LOCAL GOVERNMENT GRADE PAY LEVEL POSITION TOTAL REMUNERATION RECOMMENDED 1 APRIL 2007 PROPOSED TOTAL REMUNERATION 1 APRIL 2008 MA1Executive Mayor756,900840,159 Mayor756,900840,159 MB1Deputy Executive Mayor613,500680,985 Speaker/Chairperson613,500680,985 Deputy Mayor613,500680,985 MC2Member of Executive Council577,700641,247 Member of Municipal Council577,700641,247 Chairperson of a Sub-council577,700641,247 Whip577,700641,247 MD1Municipal Councillor290,900322,899

16. TABLE 41 REVISED REMUNERATION LEVELS PROPOSED IN THE FIRST AND SECOND REVIEW REPORTS AND ADJUSTED BY 11% WITH EFFECT FROM 1 APRIL 2008 TRADITIONAL LEADERS GRADE PAY LEVEL FULL TIME POSITIONS TOTAL REMUNERATION RECOMMENDED 1 APRIL 2007 PROPOSED TOTAL REMUNERATION 1 APRIL 2008 TA1King708,180786,080 TB1Chairperson: NHTL501,800556,998 2Full time Chairperson: PHTL413,300458,763 3Deputy Chairperson: NHTL383,800426,018 4 Full time Deputy Chairperson: PHTL 354,200393,162 TC1Full time Member: NHTL206,600229,326 2Full time Member: PHTL177,100196,581 TD1Senior Traditional Leader129,900144,189 PART TIME POSITIONS* SITTING ALLOWANCE 1 APRIL 2007 (Per Day) PROPOSED SITTING ALLOWANCE 1 APRIL 2008 (Per Day) Part time Member: NHTL744826 Part time Chairperson: PHTL885982 Part time Deputy Chairperson: PHTL 796884 Part time Member: PHTL617685 * In addition to sitting allowances, part time members are entitled to their salaries as Traditional Leaders, as well as subsistence costs (reasonable and actual expenses) and transport costs (Department of Transport tariffs for the use of privately owned vehicles), for their attendance of official meetings, seminars, workshops and conferences of the respective Houses)

17. TABLE 42 REVISED REMUNERATION LEVELS PROPOSED IN THE FIRST AND SECOND REVIEW REPORTS AND ADJUSTED BY 11% WITH EFFECT FROM 1 APRIL 2008 JUDICIARY GRADE PAY LEVEL POSITION TOTAL REMUNERATION RECOMMENDED 1 APRIL 2007 PROPOSED TOTAL REMUNERATION 1 APRIL 2008 JA1Chief Justice1,708,6001,896,546 JB1Deputy Chief Justice1,537,7001,706,847 President: Supreme Court of Appeal1,537,7001,706,847 JC1Deputy President: Supreme Court of Appeal1,452,3001,612,053 2Judge: Constitutional Court1,366,9001,517,259 Judge: Supreme Court of Appeal1,366,9001,517,259 3Judge President: High/Labour Court1,281,5001,422,465 4Deputy Judge President: High/Labour Court1,196,0001,327,560 5Judge: High/Labour Court1,110,6001,232,766 JD1Special Grade Chief Magistrate768,900853,479 Regional Court President768,900853,479 President: Divorce Court768,900853,479 JE1Regional Magistrate683,400758,574 Chief Magistrate683,400758,574 Presiding Officer: Divorce Court683,400758,574 JF1Senior Magistrate563,800625,818 JG1Magistrate512,600568,986