DA wants probe on Transnet pension

By Drum Digital
24 July 2012

The Democratic Alliance has asked Public Protector Thuli Madonsela to investigate two Transnet pension funds, MP Natasha Michael said on Tuesday.

"More than 70,000 pensioners belonging to the Transnet Pension Fund and the Transnet Second Defined Benefit Pension Fund are facing destitution as the paltry increases in their benefits of two percent per annum fail to keep up with the rising cost of living," she said.

"Inflation is currently 5.7 percent."

The formal request was submitted on Tuesday.

Michael said that as result of the poor management of the funds, Transnet pensioners who retired in 1990 on R1400 a month currently received only R3000 a month.

"Pensioners at other state-owned enterprises, such as Eskom, who retired with a similar pension in 1990 now receive approximately R8000 per month," she said.

Despite a 2010 instruction by Parliament to Transnet and the National Treasury to invest R1.9 billion into the ailing pension funds, the Treasury had not yet recapitalised the fund, citing the fact that the payment was not budgeted and was unaffordable.

"Transnet boasted an increase in profit due to rocketing freight volumes and operational efficiencies despite escalating operating costs at the end of the financial year in March," said Michael

She said earnings before interest, depreciation, taxation and amortisation -- the company's main measure of profitability -- shot up 19.8 percent to R18.9 billion.

"If Treasury is not able to inject funds into the Transnet funds, it may be time for Transnet to identify ways to restore the fund themselves."

She said Transnet was a state-owned entity and if it was not performing its obligations to pensioners, the Office of the Public Protector should investigate and make recommendations on rectifying the problems in the management and financing of Transnet pensions.

"I will continue fighting to ensure that Transnet pensioners receive increases that will enable them to maintain an acceptable standard of living in their old age," Michael said.

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