Get documents about "MIDDLE MANAGEMENT SERVICE (Salary levels 11 and 12) Inclusive
Document Sample
CONTENTS (1)
Introduction
Current remuneration system
What is an inclusive remuneration package
system and advantages?
What does the new dispensation entail?
Who is affected?
Composition of the remuneration scale
Structure of the package
Allowances/benefits to structure the flexible
portion
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CONTENTS (2)
Part-time/contract/casual/other members
Calculation of allowances/payments
Incentive Policy Framework
Contract/casual members
Translation to new dispensation
Financing of new dispensation/communication
with members
Assistance to members to structure their packages
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OUTCOMES TO BE ACHIEVED WITH
PRESENTATION
To provide an overview of the new
dispensation to HR managers and
practitioners, and especially the important
choices to be exercised and the implications
thereof on the individual MMS members
A separate workshop will be conducted per
province/for national departments which will
focus in detail on the new dispensation
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INTRODUCTION (1)
DPSA conducted investigation into
remuneration of members on salary levels 11
and 12
Proposals to convert current remuneration
system to package system tabled in PSCBC
(April 2003)
Deadlock declared in PSCBC (September
2003)
Conciliation failed (February 2004)
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INTRODUCTION (2)
Subsequent bilateral discussions with unions
failed
MPSA decided to implement new dispensation
unilaterally in terms of PSA (section 5(4)) –
effective from 1 July 2005
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CURRENT REMUNERATION
SYSTEM (1)
Current system comprises of the following
elements:
Basic salary (notch)
Service bonus
Employer’s contribution to GEPF
Employer’s contribution to registered medical
aid scheme
HOA
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CURRENT REMUNERATION
SYSTEM (2)
Other allowances such as Danger allowance,
employees working in EAs offices, acting
allowance - payable depending on certain
criteria
Participation in the SMTS (A- and B- scheme)
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WHAT IS AN INCLUSIVE
REMUNERATION PACKAGE SYSTEM &
ADVANTAGES? (1)
Single package
Consists of two broad components
Pension related (basic salary and Employer
contribution to GEPF)
Non-pensionable component (Flexible portion)
Allows member to decide on the component mix
(basic salary and flexible portion)
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WHAT IS AN INCLUSIVE
REMUNERATION PACKAGE SYSTEM &
ADVANTAGES? (2)
Choice must be exercised on the basic
(pensionable) salary (within certain parameters)
Flexible portion may either be-
An all cash flexible portion; or
An all “benefit” portion; or
A combination of both
Allows member, therefore, to personalize the
package
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WHAT IS AN INCLUSIVE
REMUNERATION PACKAGE SYSTEM &
ADVANTAGES? (3)
Facilitates transparent budgeting and planning
Allows greater flexibility in remunerating members
with scarce skills
Realizing principle of “EQUAL PAY FOR WORK
OF EQUAL VALUE”
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WHAT DOES THE NEW
DISPENSATION ENTAIL? (1)
Transforming of the current remuneration
system into an inclusive flexible
remuneration package system by including
all existing macro financial benefits into a
package, which provides flexibility to
employees to structure the package within
certain parameters
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WHAT DOES THE NEW
DISPENSATION ENTAIL? (2)
Conversion of salary (notch) and following macro
benefits/allowance into a total package:
Salary notch (Salary levels 11 & 12)
Employer’s contribution to GEPF – 15% (last
offer in the PSCBC)
Service bonus
Employer’s maximum contribution to medical
aid (R12 168 – annual amount)
HOA (R8 508) – last offer in the PSCBC
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WHAT DOES THE NEW
DISPENSATION ENTAIL? (3)
Maximum amounts for medical and HOA –
amounts contained in the employer’s last proposal
tabled in PSCBC
Provides a choice to set the pensionable basic
salary in package at certain levels (within certain
parameters) – 2 options per level
Provides to structure package for certain
allowances and/or benefits (within certain
parameters)
SMTS not included in new MMS dispensation
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WHO IS AFFECTED? (1)
New dispensation applicable with effect from 1
July 2005
Apply to all members on salary levels 11 & 12 in
service on 30 June 2005 as well as all new
appointees (including promotion) to these levels
on 1 July 2005 and thereafter
Details contained in DPSA Circular 2 of 2005 –
sent to departments and can be accessed from
DPSA website
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WHO IS AFFECTED? (2)
Members are not negatively affected on transition
(translation) to the new dispensation – will be
possible to structure package for same items (with
at least same monetary values) that have
prevailed in pre-revised dispensation
All members are translated, irrespective of
performance agreements and/or performance
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COMPOSITION OF THE
REMUNERATION SCALE (1)
Separate scales (Grades/Remuneration Bands)
for-
MMS Level 11
MMS Level 12
Each remuneration band consists of 16
remuneration packages
Existing JE weights linked to salary levels 11 and
12 remain
Remuneration scales and packages (and
translation keys) will be provided once the annual
cost-of-living adjustment for level 1 to 12 has been
concluded
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STRUCTURE OF THE PACKAGE (1)
Package for a member admitted to the GEPF
consists of:
Basic salary (pensionable)
Employer’s contribution to pension fund
(pension related)
Flexible portion (non-pensionable)
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STRUCTURE OF THE PACKAGE (2)
(Basic salary)
Two sets of basic salary apply
MMS Level 11
SET 1 - 75% of total package
SET 2 – 70% of total package
MMS Level 12
SET 1 - 76% of total package
SET 2 – 70% of total package
Member has once-off choice between sets of
basic salary
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STRUCTURE OF THE PACKAGE (3)
(Basic salary)
Implications of different Sets within each level
Set 1 (75% & 76% respectively)
Allows member to set the basic salary, on
which the employer’s and member’s
contributions to the GEPF are calculated, at
least on the levels that have prevailed before
translation to the dispensation – therefore the
pensionable income is not reduced on
translation.
“Limits” the flexible portion of the package
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STRUCTURE OF THE PACKAGE (4)
(Basic salary)
Set 2 (70% in both levels)
Allows member to set the basic salary, on
which the employer’s and member’s
contributions to the GEPF are calculated, at
levels lower that have prevailed before
translation to the dispensation – therefore a
reduction in pensionable income on
translation.
Increases the flexible portion
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STRUCTURE OF THE PACKAGE (5)
(Basic salary)
Members must exercise the choice either to be
awarded Set 1 or 2 on translation
Members may exercise the choice only once -
it may not be changed in any way or at any time -
not even with promotion from level 11 to 12 or with
the awarding of a higher package - while the
member is remunerated in terms of this
dispensation
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STRUCTURE OF THE PACKAGE (6)
(Basic salary)
Extremely important choice as it affects members’
pensionable position in future (effect on retirement
and resignation benefits).
If member fails to exercise choice within period
specified – SET 1 will be awarded as default
Due to implications and to ensure a smooth
transition, a transitional provision (grace period)
applies for 6 months, commencing on 1 July 2005,
to change the decision on Set 2 to Set 1
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STRUCTURE OF THE PACKAGE (7)
Flexible portion
Remaining portion of the package
Member afforded the opportunity to structure
this portion
Structuring may not exceed amount available in
the flexible portion
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STRUCTURE OF THE PACKAGE (8)
Members not admitted to GEPF
Package does not consists of these
components
Total package may be structured - normal
structuring rules apply
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EXAMPLE – EFFECT OF SET 1
AND 2 ON MMS LEVEL 11
Set 1 (75%) Set 2 (70%)
`
Package R250 000 Package R250 000
Basic salary R187 500 Basic salary R175 000
GEPF R24 375 GEPF R22 750
Flexible portion R38 125 Flexible portion R52 250
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EXAMPLE – EFFECT OF SET 1
AND 2 ON MMS LEVEL 12
Set 1 (76%) Set 2 (70%)
`
Package R300 000 Package R300 000
Basic salary R228 000 Basic salary R210 000
GEPF R29 640 GEPF R27 300
Flexible portion R42 360 Flexible portion R62 700
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ALLOWANCES/BENEFITS TO
STRUCTURE
Car allowance (max 25% of package)
13th Cheque (1/12 of basic salary) (excluding
members not admitted to the GEPF)
Medical assistance (employer’s contribution to
medical aid scheme)
Housing allowance (amount to be decided by
member)
Non-pensionable cash allowance
(any remaining portion of the flexible portion)
Not obliged to structure for all these
allowances/benefits
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PART-TIME/OTHER MEMBERS
A member employed in a part-time capacity (5/8th
or 6/8th basis) or an employee on salary level 10 or
lower who is awarded a package that fall within
the range of MMS Levels 11 & 12 may structure
package
The same provisions/measures applicable to full-
time members apply
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CALCULATION OF ALLOWANCES/
PAYMENTS (1)
Allowances/payments that used to be calculated
as % of member’s actual notch or a notch of a
particular salary level – now calculated as % of the
component basic salary of appropriate package
SET 1 of the component basic salary must be
utilised for this purpose, irrespective whether
individual member’s basic salary is set at SET
1 or 2
This means that all members on the same
package who meet the qualifying criteria for a
particular allowance will be compensated equally
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CALCULATION OF ALLOWANCES/
PAYMENTS (2)
Acting allowance for members who act in a higher
(vacant and funded) SMS position - calculated as
the difference in the acting member’s total
package and the minimum package attached to
the higher SMS post.
Acting allowances for employees on salary levels
1 to 10 who act in a MMS Level 11 or 12 position -
calculated as the difference between member’s
salary notch and the basic salary ito Set 1 (75% or
76%) of the minimum package of the higher
vacant post
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INCENTIVE POLICY FRAMEWORK
Members qualify for pay progression in terms of
the Incentive Policy Framework, as contained in
DPSA letter 1/7/1/4/1 dated 27 January 2003
Performance awards/bonuses (merit awards)
payable in terms of departmental performance
schemes, as provided for in said DPSA letter, are
limited to a maximum 14% of total package
Departments should align their departmental
policies accordingly
32
CONTRACT/CASUAL MEMBERS
Remuneration of a contract member (with a fixed
term) - equal to the total package of an equivalent
permanent member, derived from-
evaluation of the job (PSR), or
remuneration package of a similar existing
position
Clause 36 of PSCBC Resolution 3 of 1999 –
payment of 30% of basic salary in lieu of benefits
- is not applicable to MMS members
Remuneration of casual (hourly, weekly or monthly
basis) - set proportional to the total package of an
equally graded full-time member
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TRANSLATION TO NEW
DISPENSATION
Members to be translated to appropriate bands
(scales) and packages ito of translation keys
Separate translation processes to apply for
members-
on standard salary notches
not on standard (identifiable) notches
Members must be informed in writing that errors
(over/under payments) would be rectified
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TRANSLATION OF MEMBERS ON
STANDARD NOTCHES
Translation to scales and packages and
structuring of package - to be done at
departmental level – not “automatic” on PERSAL
Each member must be informed in writing of new
band (scale) and package
Each member to structure package - must be
confirmed in writing before department may
implement on PERSAL
Member’s package cannot be “implemented” on
PERSAL without the opportunity to structure it
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TRANSLATION OF MEMBERS NOT
ON STANDARD NOTCHES
Translation of any member that cannot be effected
ito of the translation keys – to be submitted to the
DPSA for an appropriate translation key.
Once DPSA has provided the translation key – the
same process for “members on standard notches”
must be followed.
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FINANCING OF NEW DISPENSATION/
COMMUNICATION WITH MEMBERS
Expenditure must be defrayed from departmental
budgets and, where necessary, requests for
additional funds should be included in
departments’ adjusted estimates for the 2005/06
financial year
DPSA addressed a communiqué to each member
– departments to ensure that each affected
members receives it
New dispensation, and implications of members’
choices in terms thereof, spelt out in communiqué
37
ASSISTANCE TO MEMBERS TO
STRUCTURE THEIR PACKAGES (1)
DPSA provides an Excel spreadsheet (MMS
Model) to assist members to structure packages
Calculations in Model may differ from PERSAL
Model can be accessed from DPSA website
(www.dpsa.gov.za) (follow links to Document
Archive/Circulars/Remuneration
Members are encouraged to make use of
services of private experts
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SUMMARY OF KEY ELEMENTS (1)
Two separate scales for levels 11 and 12
Existing job weights retained
Each scale – 16 packages
Pay progression still applicable
Performance bonuses still payable in terms of
departmental performance management systems
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SUMMARY (2)
Package
Admitted to GEPF Not admitted to GEPF
Basic salary No components
Level 11 –
Total package
75%/70% “constitutes flexible
Level 12 –
portion”
76%/70%
To structure for
Employer
contribution to same allowances
GEPF and benefits (excl
Flexible portion
13th Cheque)
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SUMMARY (3)
Flexible portion
Car allowance (max 25% of package)
13 Cheque (1/12 of basic salary) (excluding
members not admitted to the GEPF)
Medical assistance (employer’s contribution to
medical aid scheme)
Housing allowance (amount to be decided by
member)
Non-pensionable cash allowance
(any remaining portion of the flexible portion)
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FUTURE PRESENTATIONS
DPSA to conduct a detailed follow-up session on
the MMS dispensation and implementation thereof
Focus will be on-
Mechanics of dispensation – the do’s and do
not’s
Tax implications
Practical examples (case studies)
Practical demonstration of DPSA MMS Model
(Excel spreadsheet)
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