UIF posts R9bn surplus
Pretoria - The Unemployment Insurance Fund (UIF), a division of the Department of Labour, posted a R9bn surplus in the year to March, said Boas Seruwe, the fund's commissioner, in Pretoria on Friday.
The result far exceeded the fund's target of R3bn.
One of the major reasons for the increased surplus is the Department of Labour's tough stance on compliance and the enforcement of labour laws regarding registration and payment of contributions to the fund. Seruwe said this had resulted in more companies complying with the law.
The fund also took a strategic policy decision two years ago to expose itself to the equity market. Seruwe said the initial investment amount of R1.3bn in equities had grown to R8bn. The fund had investments in government bonds, parastatal bonds and financial institutions.
Seruwe said that, despite this stellar performance, a number of challenges still existed. "We cannot afford to drop our guard. The fund needs to continually devise innovative strategies to do better," he said.
The decentralisation of the fund has managed to reduce the turnaround time in settling claims from seven weeks to five weeks.
"This approach will enable both employers and employees to lodge claims electronically without the effort of going to the offices. This will also enable the department to deal with backlogs in claims as it allows for work to be moved from one labour centre to another without fuss," Seruwe said.
At the end of March 2010, the fund's total assets were sitting at R44bn, and these have grown to a phenomenal R56bn in March. The UIF has 7.6 million people registered on its database, ranging from chief executives and other professionals to gardeners and domestic workers.