1 A Report on the implementation of the Mobility/Exit Mechanism for members of the SA National Defence Force, as well as related matters Prepared by the.

1

A Report on the implementation of the Mobility/Exit Mechanism for members of the SA National Defence Force, as well as related matters

Prepared by the Directorate Human Resource Planning

13 Sept 05

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Aim

To inform the Portfolio Committee on Defence on the implementation of the Mobility/Exit Mechanism (MEM) for members of the SA National Defence Force and related matters

3

Scope

Exit Mechanisms– Phase 1: Overview from 1994 to 2005– Phase 2: Intended implementation period –

FY 2005 to 2008 (MTEF)– Phase 3: Intent over the long term

Service systems contract expiryUpdate on broad based representivityUtilisation of the Military Skills

Development SystemConclusion

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Exit Mechanisms: Phase 1

Overview 1994 to 2005– Downsizing/rightsizing origins

• Interim Constitution (Act 200 of 1993) Section 236(c)

• Consitution (Act 108 of 1996) Section 24(1) of Schedule 6 and Provisions of the Interim Constitution continued in force, Sections 236(1),(2),(3),(6) & (7)(b) & (8), 237(1) and 2(a)

– Provisions aimed at the size and affordability of the DOD and informed the Defence Review of 1998

• Envisaged compulsory employer-initiated retrenchment – Overtaken by the availability of the Voluntary Severance Package

(VSP) (July 1996) and the Employer Initiated Package (EIP)

• The DOD steadily downsized towards 70 000, though natural attrition mainly

– Rightsizing = E3 and R3

5

Exit Mechanisms: Phase 2Legal basis

– GEPF amended rules 14.8 and 20– Approval by National Treasury– Minister of Defence (Section 55 of Defence Act [42

of 2002])Intent of MEM

– Tangible rightsizing progress– Execute realistic succession planning– Guard against the exodus of expertise/scarce skills– Advise members iro career progress as informed

by the Transformation and Restructuring imperatives

– Choice to accept/reject offer

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Exit Mechanisms: Phase 2 (cont)

Guidelines for Succession Planning iro MEM– Are functional groups/musterings constraint

by critical shortages– Status of ETD and learner throughput– Maintenance of expertise– Contribution to rightsizing (MTEF & longer)– Contribution to race-rank distribution– “Old” Service System contract expiries and

renewal justified– Succession planning:

• Role of Services and Divisions

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Exit Mechanisms: Phase 2 (cont)

Mobility/Exit Mechanism– MEM is intended to be implemented over a

three-year period or longer– Flexibility in number of members who may be

progressively identified– Maintain a balance between progressive

rightsizing and the retention of critical skills– Tempo:

• Planned to allow for re-prioritising Defence Budget• Realistic succession planning • Successive planning for the MTEF planning and

budgeting cycles

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MOBILITY/ EXIT MECHANISM FOR SANDF MEMBERS

Less than 10 years service and/or younger than 55 years of age

10 years pensionable service and 55 years or older

GRATUITY & ANNUITY

- NO SCALING DOWN OF PENSION BENEFIT RULE 14.3.3(b)

- WITHOUT AN ADDITION OF PENSIONABLE SERVICE RULE 14.2.4(b)

ACTUARIAL INTEREST RULE

14.4.2

STATE GUARANTEE: Third party debts recovered from exit pay

CONTRACTUAL OBLIGATIONS: Released

PRO-RATA SERVICE BONUS

LEAVE: Payment of leave credit

RESETTLEMENT: Actual expenses

MEDICAL PROVISION: Plus 10 years service, option to buy into RFMCF up to age 60, and eligible for medical service according to SAHMS provisions

EXIT PAY: 2 weeks for every full year service, but a minimum of R 15 000.00 payable

OFFICIAL HOUSING: One month’s notice

SUBSIDISED MOTOR VEHICLE SCHEMES

RESKILLING: Maximum of R13 000.00 for reskilling, training for employment opportunities, and entrepreneurial skills

MEM

Pension Benefits ito GEPF

Departmental Benefits

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MEM PlanningMEM PLANNING PER BUDGET HOLDER FOR FY2005/06 AS AT 23 AUGUST 2005

BH CODE BUDGET HOLDERPLANNED OFFERS

FY2005/06

EXPECTED ACCEPTANCE FOR FY2005/06

COST FOR ITEM 10

COST FOR ITEM 15

TOTAL COST FOR FY2005/06

01 SA ARMY 718 359 31,589,266 4,667,000 36,256,26602 SA AIRFORCE 48 48 11,607,239 1,824,000 13,431,23903 SA NAVY 50 50 10,705,472 650,000 11,355,47205 SAMHS 40 40 5,865,522 429,000 6,294,52207 SERVICE CORPS 5 4 884,164 51,000 935,16410 HR SUPPORT CENTRE 7 7 729,588 301,658 1,031,24611 LEGAL SERVICES 10 10 1,248,714 26,000 1,274,71412 DEF TRAINING INST 14 11 2,783,647 143,000 2,926,64713 MOD CORP COMMS 0 0 0 0 014 MOD RES FORCE 1 1 233,791 0 233,79115 CHIEF FOREIGN RELATIONS 0 0 0 0 017 STRATEGIC PLANNING 0 0 0 0 018 EQUAL OPPORTUNITIES 1 1 258,478 13,000 271,47820 MINISTER OF DEFENCE 0 0 0 0 021 C SANDF 0 0 0 0 022 DEFENCE INSPECTORATE 0 0 0 0 023 MOD CHAPLAIN GENERAL 0 0 0 0 024 POLICY AND PLANNING 2 2 861,551 87,230 948,78125 FINANCE DIVISION 0 0 0 0 026 SECRETARY FOR DEFENCE 0 0 0 0 030 JOINT SUPPORT 0 0 0 0 031 LOG AGENCY 84 14 0 91,000 91,00032 CMI 29 15 2,046,501 117,000 2,163,50133 MILPOL 68 68 4,847,422 1,450,100 6,297,52240 DEF INT 30 30 4,301,021 505,900 4,806,92150 CJ OPS 27 26 4,221,272 299,650 4,520,92260 ACQUISITION 2 2 307,846 13,000 320,846

1,136 687 82,491,494 10,668,538 93,160,032TOTAL

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MEM Planning (cont)

MEM PLANNING PER RANK FY 2005/06

RANK PLANNED OFFERS

FY 2005/06

PLANNED ACCEPTANCE

(60.4%)

ACCEPTANCE PLANNED

PER CENT

Maj Gen 3 2Brig Gen 18 11Col 59 41Lt Col 100 75Maj 63 48Capt 45 27LT 5 32LT 1 1WO1 177 97WO2 129 75SSgt 43 26Sgt 109 72Cpl 102 68L/Cpl 70 25PTE 212 116 16.90%Total 1,136 687

NOTE: Planned acceptance rate estimated - White 78% and Black 22%

Junior Officers

Senior Warrant OfficersSenior Non-Commissioned

Junior NCO

1.80%

16.90%

11.50%

25%

14.20%

13.50%

Top Officers

Senior Officers

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MEM Planning (cont)MEM PLANNING PER BUDGET HOLDER FOR FY2006/07 AS AT 23 AUGUST 2005

BH CODE BUDGET HOLDERPLANNED OFFERS

FY2006/07

EXPECTED ACCEPTANCE FOR FY2006/07

TOTAL COST ITEM

10 FY2006/07

TOTAL COST ITEM

15 FY2006/07

TOTAL COST FY2006/07

01 SA ARMY 0 0 0 0 002 SA AIRFORCE 152 152 40,332,958 5,776,000 46,108,95803 SA NAVY 0 0 0 0 005 SAMHS 9 9 1,371,578 117,000 1,488,57807 SERVICE CORPS 32 24 6,163,868 678,667 6,842,53410 HR SUPPORT CENTRE 98 98 12,031,800 2,247,239 14,279,03911 LEGAL SERVICES 0 0 0 0 012 DEF TRAINING INST 3 3 568,045 26,000 594,04513 MOD CORP COMMS 1 1 168,560 13,000 181,56014 MOD RES FORCE 1 1 233,791 0 233,79115 CHIEF FOREIGN RELATIONS 3 3 637,398 13,000 650,39817 STRATEGIC PLANNING 0 0 0 0 018 EQUAL OPPORTUNITIES 2 2 988,756 26,000 1,014,75620 MINISTER OF DEFENCE 0 0 0 0 021 C SANDF 0 0 0 0 022 DEFENCE INSPECTORATE 0 0 0 0 023 MOD CHAPLAIN GENERAL 0 0 0 0 024 POLICY AND PLANNING 5 5 1,351,174 497,600 1,848,77425 FINANCE DIVISION 0 0 0 0 026 SECRETARY FOR DEFENCE 0 0 0 0 030 JOINT SUPPORT 0 0 0 0 031 LOG AGENCY 0 0 0 0 032 CMI 106 106 11,007,341 817,000 11,824,34133 MILPOL 31 32 2,640,876 682,520 3,323,39640 DEF INT 27 18 3,021,619 360,600 3,382,21950 CJ OPS 1 1 348,218 13,000 361,21860 ACQUISITION 0 0 0 0 0

471 455 80,865,982 11,267,626 92,133,607TOTAL

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MEM Planning (cont)

MEM PLANNING PER RANK FY 2006/07

RANK PLANNED OFFERS

FY 2006/07

PLANNED ACCEPTANCE

(96.6%)

ACCEPTANCE PLANNED

PER CENT

Maj Gen 2 2Brig Gen 8 8Col 28 27Lt Col 52 50Maj 35 34Capt 11 11LT 3 32LT 0 0WO1 127 123WO2 66 64SSgt 44 42Sgt 36 34Cpl 43 41L/Cpl 13 13PTE 3 3 0.60%Total 471 455

Top Officers 2.10%

Senior Officers 16.90%

Junior Officers 8.30%

Senior Warrant Officers

41%

Senior Non-Commissioned

17.10%

Junior NCO12%

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Intent over the long term: post 2008 Phase 3Difficult to forecast the exact rightsizing results Identified members may decline offers to exitMembers with high potential may apply and be

considered for an offer to exitA degree of fluidity throughout the

implementation of the MEM is expectedContinuous (monthly) monitoring of progressRepresentations to Government may be made

should the implementation of the MEM over the MTEF period not significantly contribute to rightsizing

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Service Contract Expiry (MTS/STS)

010203040

50607080

Snap-Shot Period

Num

ber

White 22 20 35 14 26 11 15 14 13 1

African 3 15 1 15 30 12 34 2 18 0

Coloured 2 5 4 5 10 5 3 1 1 0

Indian 3 3 2 1 1 0 2 0 0 1

MTS STS MTS STS MTS STS MTS STS MTS STS

2001 2002 2003 2004 Aug-05

13 (3.7%)

Service Systems Contract Expiry

171 (48.8%)

36 (10.2%)

130 (37.1%)

Total

350

15

AFRICAN63%

INDIAN1%

WHITE23%

COLOURED13%

DOD Race Composition

As at 15 August 05

999

48 149

17 246

9 667

16

Gen

Lt Gen

Maj Gen

Brig Gen

Col

Lt Col

Maj

Capt

LT

2LT

Cpln

WO1

WO2

SSgt

Sgt

Cpl

L/Cpl

PTE

Def Rev

SANDF’S Race Composition per Rank as at 15 August 05100% (1)

5 (71%) 2 (29%)

28 (65%) 15 (35%)

70 (42%) 95 (58%)

263 (31%) 589 (69%)

544 (31%) 1 210 (69%)

1076 (47%) 1 235 (53%)

1 442 (55%) 1 197 (45%)

1 167 (73%) 421 (26%)

322 (76%) 102 (24%)

96 (74%) 34 (26%)

643 (26%) 1 795 (74%)

1 136 (44%) 1 436 (56%)

3 255 (60%) 2 204 (40%)

6 676 (80%) 1 642 (20%)

8 896 (93%)

4 785 (95%)

17 070 (96%)

706 (7%)

270 (5%)

662 (4%)

76% Black (African, Coloured & Indian) 24% White

4 (9%)

54 (33%)

376 (44%)

77 (44%)

657 (28%)

537 (20%)

1 185 (49%)

793 (31%)

839 (15%)

-438 (-5%)

-1 695 (-18%)

-994 (-20%)

-3 771 (-21%)

24 (1%)

1 (1%)

Deviation 1 %

17

2 325 (13%)

7 (100%)

83% Male 17% Female

1 (100%)

15 407 (87%)

43 (100%)

153 (93%) 12 (7%)

738 (87%) 114 (13%)

1 429 (81%) 325 (19%)

1 694 (73%) 617 (27%)

1 672 (63%) 967 (37%)

1 100 (69%) 488 (31%)

240 (57%) 184 (43%)

117 (90%) 13 (10%)

2 105 (86%) 333 (14%)

2 128 (83%) 444 (17%)

4 380 (80%) 1 079 (20%)

6 825 (82%) 1 493(18%)

8 165 (85%) 1 437 (15%)

4 293 (85%) 762 (15%)

Gen

Lt Gen

Maj Gen

Brig Gen

Col

Lt Col

Maj

Capt

LT

2LT

Cpln

WO1

WO2

SSgt

Sgt

Cpl

L/Cpl

PTE

Macro Gender

SANDF Gender Distribution per Rank – 15 August 05

Deviation 1%

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MSDS Intakes & ProjectionMSDS Intakes

0

1000

2000

3000

4000

5000

Intakes

Tota

l

Total 1817 1882 3836 4304 4248

Mar-03 Mar-04 Jan-05 Jan-06 Jan-07

Jan 2006 IntakeSA Army – 3 000SA Air Force -196

SA Navy – 600SA Medical Health Service -196

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0

1000

2000

3000

4000

5000

6000

% 9.7 7.0 7.1 16.7 16.2 21.8 21.3 33.4

18 to 24 1949 1271 1163 2688 2579 3475 3502 5924

Dec-00 Dec-01 Dec-02 Dec-03 Jan-04 Feb-04 Jun-04 Aug-05

Regular Force PTE’s Aged between 18 and 24 years old

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MSDS Projected

Long Term Planning Table

Financial Year

Intake Strength Estimate

Total MSDS

Members In System

% of RegF

Total MSDS Costs (Estimated)

2004/05 3,000 4,898 8.75 360,301,446 2005/06 3,800 6,800 12.14 716,441,112 2006/07 4,600 8,400 15.00 894,710,426 2007/08 5,400 10,000 17.86 1,067,081,968 2008/09 6,200 11,600 20.71 1,239,453,511 2009/10 7,000 13,200 23.57 1,411,825,053

Note: Projected Regular Force Strength is 56 000 out of 70 000 total DOD Strength.

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MSDS HR Race Composition Compared

White10%

Indian1%

Coloured11%

African78%

AFRICAN63%

INDIAN1%

WHITE23%

COLOURED13%

MSDS Race Composition

DOD Race Composition

As at 15 August 05

Total Strength 5 775

Total Strength 76 061

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MSDS HR Gender Composition Compared

MSDS Gender Composition

0%0%

70%

30%

DOD Gender Distribution

Female22%

Male78%

Total Strength: 5 775

Total Strength: 76 061

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CSS2%

PSAP20%

MTS36%

LTS33%

STS2%

AUX0.1%

MSDS9%

Total Strength: 76 061As at 15 August 2005

Service System Composition

1 543

102

14 813

5 775

1 886

25 035

26 907

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ConclusionUntil now, HR rightsizing efforts

have been unsatisfactoryDepending on progress to rightsize

via the MEM, compulsory exits may need to be decided upon later

SANDF is on a steady path to migrate from FSS to NSS

MEM should contribute to a more balanced demographic composition

SANDF will maintain rejuvenation tempo (effect analysis survey)

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Discussion and questions