2. UNEMPLOYMENT INSURANCE FUND BRIEFING FOR PORTFOLIO COMMITTEE CAPE-TOWN 1 ST JUNE 2004

3. UNEMPLOYMENT INSURANCE FUND This new act is a product of an extensive research and an inclusive consultative process dating as far back as 1994. Stakeholders who participated were drawn from the academia, labour, business, ILO, the public and other government departments.

4. PROCESSES INFORMING THE ACT s Minister of Labour’s Five Year Plan 1995 s Labour Market Commission Report s Stakeholders Forum of 1996 s Report of the Ministerial Task -Team s DoL’s Position Paper s Second Stakeholders Forum 1998 s Public Representations s Minister of Labour’s 15 Point Plan 1999

5. PROCESSESS INFORMING THE ACT CONT’ Detailed input from ILO. Detailed input from National Treasury.

6. OBJECT OF RESTRUCTURING THE FUND ¥ To develop a new policy on Unemployment Insurance Coverage and the design of an institutional framework, to deal with both the administrative and legislative short- comings of the fund.

7. KEY ASPECTS OF THE NEW LEGISLATION ¥ Coverage ¥ Compliance and Enforcement Measures ¥ Discrimination ¥ Entitlement to Benefits ¥ Benefit regime ¥ Actuarial inputs

8. KEY ASPECTS OF THE NEW LEGISLATION ¥ Employer-employee Database

9. COVERAGE ¥ Learnerships ¥ Public Servants ¥ Company Directors & Members of a CC ¥ Migrant Workers

10. COMPLIANCE AND ENFORCEMENT Compliance Orders SARS Interest and penalties Suspension of a contributor.

11. ENTITLEMENT TO BENEFITS Ordinary Unemployment benefits Illness benefits Maternity benefits Adoption benefits Dependent’s benefits

12. AFFORDABLE BENEFIT REGIME Sliding scale Top up

13. ACTUARIAL EVALUATION Actuarial inputs Actuarial database Annual actuarial evaluations

14. EMPLOYER-EMPLOYEE DATABASE Duty of the COMMISSIONER. Maintain databse of Information to be supplied by employers Feedback to employers

15. CONTRIBUTOR DATA EXTRACT

16. CONTRIBUTOR SALARY DISTRIBUTION

17. INCOME AND EXPENDITURE YEARBENE FITS MIL. BENE FIC. (000) INCO ME ADMI N EXP (000) EMPL OYER S 19972685870269618327540 0 19983051842256919728047 0 19992984769275623928320 0 20002905674279133827044 0 20012838637369461827543 5

18. FINANCIAL POSITION OF FUND

19. PERIOD TAKEN TO APPROVE CLAIM PER REGION

20. PERIOD TAKEN TO APPROVE CLAIM PER SECTION

21. CHANGES IN CLAIM PATTERNS Number of claims increased significantly from August 2003 onwards. Claim patterns appear to be changing Period taken to apply - average increased from 45 to 75 days Period to approve claim – average increased from 30 to 37 days Expect more IBNR claims to emerge in the future due to the additional delay Major reason for the increase in outstanding claims reserves

22. Claimants by termination reason and sex