Preparing for retrenchment

supersunbird

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So say your most of your division (75%) has been section 197'd over to a new employer because they were giving support to that employer and the support contract ended and that employer is taking them to do the support internally.

Now you are giving support to another company mostly and wont be going over and you know your companies support contract with that other company is ending Dec' 2014 and its 50% that it wont be renewed, how do you spend 2014 preparing?

Possibilities/thoughts/considering:
- Have retrenchment cover that will pay 75% of income for up to 6 months.
- Theres UIF but I think I calculated that will pay R4800pm and I don't know how long.
- Have to choose a new medical scheme anyway, going to choose something without savings plan so I can get my current R8000 out (see, I hardly ever use it currently) and it will be a plan where I save R700pm to what I am paying now.
- Wait till retrenched (instead of finding a new job during the next year) so you can get a retrenchment package based on being at the company at 6.7 years at that stage?
- Cancel as many monthly debit orders (MTN contract R299 is expiring Feb for example, wont renew anyway, TopTV removed my fav channel, I should have dropped them already lol) as possible.
- Then saving/investing as much of those savings from medical aid and debit orders and similar as possible, already saving 10% of income currently.
- Investment properties costs is 90% covered by rental.
- Sell second paid-for vehicle end of next year, should be enough to settle my 40% of my newer vehicles costs and use other savings and retrenchment payout settle the rest of the newer vehicle.
- Try to do any training the company will pay for (you get 15 days training leave).
- Use your 20 days annual leave to do other training you might want to.

Any other ideas or thoughts on how to prepare?

The contract might be renewed or we might get merged with another support division during the year since we would be over resourced for this contract, if that happens then I'd just take it as a benefit that I have so much savings and can pay off the newer car anyway.
 
Access bond. If sht goes sideways then it can catch you...not great for long term financial position, but hey one does what one must. And if you don't use it then no harm done...we'll it costs a couple of bucks but who cares?
 
Access bond. If sht goes sideways then it can catch you...not great for long term financial position, but hey one does what one must. And if you don't use it then no harm done...we'll it costs a couple of bucks but who cares?

Don't have such and too costly to convert...

Anyway, my debt (things that must be paid) is a homeloan+property rates+levy that is covered 90% by rental income and my newish Ford Figo at 2150pm (and its insurance at R716). That's it.

Anything else payments can be stopped at any stage.
 
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It *seems* to me that people accepting voluntary retrenchment seem to get better deals...though I have little experience with this. Might already be too late in this case...

Don't have such and too costly to convert...
That is up to you. I'm just saying it has saved many people's bacon.
 
Bit off the topic but....

Stick to your plan whether you get retrenched or not. If not then you would have been able to save quite a bit which you should then put away into a rainy day fund should this happen again in future.

Best of luck, hope it does not happen and if it does hope you find something new early in 2015.
 
Just my thoughts on some of your ideas - I received my letter of intent to retrench on the 31st of October, so I've been trying to find out as much as I can about the whole process.

- Wait till retrenched (instead of finding a new job during the next year) so you can get a retrenchment package based on being at the company at 6.7 years at that stage?

The common severance is 1 week's pay for each full year of service, so that would give you 1.5 months' pay. If your company is nice, they might make the payout higher (even pro-rata the last year), but 1 week/year is law. The UIF is nice to stop some gaps, but I'd suggest you start asking around about new jobs and start networking from mid next year. You might lose out on the severance pay if you leave early but, given enough time, you might find a higher paying job that'll work out better in the long run and give you peace of mind. Year-end is not a nice time to be looking for a new job.


- Use your 20 days annual leave to do other training you might want to.

If it's used for training/studying, it's good. Otherwise save it up as the company has to pay out all annual leave that has not been taken.


As a final note, settle as many of your debts and pay monthly costs ahead by a month or 2 if possible to prepare for the worst eventuality. You are quite lucky to have a year's warning - use all the time you have.
 
Just my thoughts on some of your ideas - I received my letter of intent to retrench on the 31st of October, so I've been trying to find out as much as I can about the whole process.



The common severance is 1 week's pay for each full year of service, so that would give you 1.5 months' pay. If your company is nice, they might make the payout higher (even pro-rata the last year), but 1 week/year is law. The UIF is nice to stop some gaps, but I'd suggest you start asking around about new jobs and start networking from mid next year. You might lose out on the severance pay if you leave early but, given enough time, you might find a higher paying job that'll work out better in the long run and give you peace of mind. Year-end is not a nice time to be looking for a new job.




If it's used for training/studying, it's good. Otherwise save it up as the company has to pay out all annual leave that has not been taken.


As a final note, settle as many of your debts and pay monthly costs ahead by a month or 2 if possible to prepare for the worst eventuality. You are quite lucky to have a year's warning - use all the time you have.

Thanks for the input, I'll take it into account.

The municipal property rates are already a month ahead and will be 3 months ahead by that time, and the levy is about a quarter ahead and will be more than a month ahead by that time if I leave the two going just as they are ( I overpay a small bit monthly already).
 
If you have such a long time to plan would it not be best to see if you can get a package and find a job?
 
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