UIF cash stores may be depleted by 2013
Of the R23,5 billion UIF surplus, R4 billion has been set aside to cover economic crisis.
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An actuarial report for the South African Unemployment Insurance Fund has
noted that while the fund was in a sound financial position to weather the
recession, bad economic conditions may deplete its cash stores by up to R9
billion by 2013.
According to the report, the UIF has a surplus of R23,5 billion, of which R4
billion has been set aside to cover the economic crisis currently facing the
world.
However, if these conditions continue, between R3 billion and R9 billion
could be lost from this surplus in the next three years, warn the actuaries.
The UIF has meanwhile announced that R40 million from the R4 billion set
aside would be used to train unemployed South Africans. A further R1.2 billion
would be spent on the state's training lay off program.
Several other factors could impact the accumulated surplus. These include the
decline of investment returns due to lower interest rates, as well as employer
defaults due to the recession.
Also, proposals by the UIF to improve benefits could also affect the
cash funds. Recently, the UIF proposed to increase benefit days from the current
238 to 260. In addition, lower earners would see the percentage of their final
salary paid jump from 60% to 65% for UIF benefits. High earners would have that
figure increase from 38% to 45%.
In the 2007-2008 fiscal year, the UIF paid out R2 billion to nearly 400,000
claimants. This number jumped to R2.8 billion to 474,800 claimants in the
2008-2009 fiscal year.
Revenue collected by the Unemployment Insurance Fund rose to R10.3 billion -
an increase of 12%.
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