SA: UIF, Compensation Fund Channeled Towards Economic Development – Minister

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South Africa’s Labour Minister, Mildred Oliphant has said the Unemployment Insurance Fund and the Compensation Fund’s investments are playing a meaningful role as catalysts for economic activity.

Leading a debate on her department’s Budget Vote in the National Assembly, the Minister said the Unemployment Insurance Fund (UIF) has accumulated a surplus of R130 billion as at the end of February 2017, while the Compensation Fund (CF) accumulated R57 billion in the same period.

She said both the funds were not sitting idle, as they were being invested in the economy through the Public Investment Corporation (PIC).

“Let me start with the Unemployment Insurance Fund to illustrate how these monies are invested by the PIC. These monies are spread through various investment instruments, including but not limited to, government and parastatal bonds, listed equity, money market instruments, listed property equity and socially responsible investments.

“We have also invested in projects such as the provision of student accommodation and student loans, and already 10 000 beds for student accommodation have been delivered.

“I am therefore inclined to argue that the reason we do not have load shedding is because a sizeable chunk of this money is invested in assets such as Eskom’s infrastructure development programme, including big projects such as Medupi power station,” she said.

The Minister said the UIF’s investment portfolio is dedicated to developmental investment initiatives that are mainly focused on job creation and job retention.

She said institutions like Productivity South Africa are tasked with promoting employment growth and productivity.

“Whilst it is charged with the responsibilities of advocating and inspiring a productive competitive South Africa, it is also responsible for national projects such as the Turnaround Solutions.

“The Turnaround Solutions has saved over 145 000 jobs and created more than 600 new job opportunities since its inception.

“The Unemployment Insurance Fund also funds the Training Lay-Off scheme, a scheme that is designed to prevent job losses in companies in distress.”

Minister Oliphant said workers who contribute to the UIF can rightfully claim that they play a meaningful role in stimulating economic activity in the country.

“We must also not forget that during the 2008 global economic crisis, close to a million workers lost their jobs and the Unemployment Insurance Fund was the only place they could turn to for the much needed relief,” she said.

Compensation Fund

Minister Oliphant said the Compensation Fund has, through the PIC, invested its surplus in various investment instruments such as government and parastatal bonds, equity, money market instruments, listed property equity and social responsible investments.

She said a total of R37 billion is invested in government bonds and the rest in other investment instruments.

“It is worth noting that the Compensation Fund has also participated in a public-private partnerships that built a state-of-the-art health facility in Modderfontein [BUSAMED], which will cater for and prioritise workers who get injured on duty.

“This is in addition to the Rand Mutual Association and the Compensation Fund habilitation and rehabilitation facility in Welkom, which is fully operational as we speak.

“I hope that this clarifies and debunks the myth that the department and/or the funds are sitting on billions of rands. It must also be placed on record that this money belongs to workers and it is there as an insurance policy to meet our obligations in terms of the Unemployment Insurance Act, likewise the Compensation fund,” she said.

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