Transnet pension funds table relief proposals

2011-11-25 12:49

Transnet and two of its pension funds tabled proposals aimed at bringing “relief” to the state company’s 78 000 pensioners before Parliament’s portfolio committee on public enterprises this morning.

The proposals, presented to the committee by the Transnet Second Defined Benefit Fund’s (TSDBF) board of trustees chairperson Peter Moyo, include paying five months’ pension to its pensioners via bonuses.

“The proposals provide enhanced benefits which we believe will bring some relief to pensioners,” said Moyo.

The proposals were a joint effort between Transnet, the TSDBF trustees and the Transnet sub-fund of the Transport Pension Fund (TTPF).

They are subject to approval by the TSDBF’s board of trustees, which sits next week.

The TTPF board of trustees has already approved the proposals.

Transnet, working with the trustees of both funds, had considered various options to address the plight of its pensioners, Moyo said.

He said the TSDBF and TTPF would target CPI-linked increases, targeting 75% of CPI in the medium to long term, subject to affordability.

The Transnet Pension Fund was established in 1990, on the corporatisation of Transnet out of the government, and had deficit of R17.2 billion at the time.

In November 2000, it was restructured to create three funds, one of which was the TSDBF.

All 101 635 pensioners at that date were transferred to the TSDBF with a related pension liability of R17.8 billion.

The TSDBF, which is a closed fund with no income from future contributions, was allocated 56.9% of the assets, or R19.9 billion.

The funds would embark on an intensive communication and engagement campaign on the changes in the coming weeks, Moyo said.

“The enhancement of benefits does not have a negative impact on Transnet’s ability to deliver on its mandate, nor does it have a negative impact on the financial position of either of the funds,” he said.

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