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Cape Town - Parliament's public enterprises committee on Wednesday vowed that the lot of Transnet pensioners living on as little as a few hundred rands a month would be improved before the end of the year.
Committee chair Vytjie Mentor said she would give Transnet a few weeks to find a way of increasing the pensions - which are fixed at an annual increase of 2% - or get parliament to vote a change to the law that limits increases to the below-inflation figure.
"I think we will conclude this issue before the medium-term budget framework," due in October, Mentor told MPs after hearing submissions by Transnet and disgruntled pensioners.
"We cannot allow a situation where people are impoverishing because of a law of parliament. We have a constitutional obligation to look into this."
At the heart of the issue is the fairness of an appendix to the Transnet Pension Fund Amendment Act, voted in 10 years ago, which limited annual increases to payouts to members of the Transnet Second Defined Pension Benefit Fund (TSDBF) to 2%
This has translated into an average pension of R2 833 per month for the fund's 79 400 dependants. Many struggle to cope with a medical contribution of just over R200 per month, while the entire pension of some came to about R220, according to the president of the SA Association of Retired Persons, former Transnet employee John Benwell.
"We repeatedly hear that pensioners are relying on one meal a day or less," he told the committee.
"All we ask is that pensions be adjusted in line with inflation. The rules should be adjusted accordingly and the money provided for this by the state or by Transnet."
His concerns were echoed by ANC MP Mlindi Nhanha, who said his aunt received a monthly pension of R350 as the widow of a man who had worked for Spoornet for more than 40 years.
Transnet representatives said the pension fund, which started life in 1990 with an inherited deficit of R17bn but was financially sound at the moment, would need an injection of close to R20bn if pension increases were linked to CPI inflation and the adjustment was made retroactive.
"We cannot afford that," Vuyo Kahla from the office of the group chief executive of Transnet told the committee.
He said Transnet has for years grappled with the issue but could not resolve it without the intervention of the minister of public enterprises or treasury.
"We need other players that are higher than us."
Helen Walsh, head of group taxation at Transnet, said the stability of the fund had been ensured by immunising the majority of its investments to ensure guaranteed returns up to 2021.
It received an injection of about R3bn when Transnet sold its stake in the V&A Waterfront in Cape Town, and had received ex-gratia capital from the company.
But she warned that trying to raise the rate of annual pension increases to even half the CPI figure could see pensioners lose the bonuses that are paid to them on an ad-hoc basis.
The TSDBF is a closed fund, comprised of those pensioners who were dependent in 1990 when the company was corporatised. Its membership decreases annually by nearly 3 000 as members die.
Inkatha Freedom Party MP Mario Oriani-Ambrosini pointed out that random bonuses were an inadequate measure to address the dire needs of pensioners, more so because they did not count towards the sum on which the annual 2% increase was calculated.
He pleaded that the issue should be seen in humanitarian and not financial terms.
"This is repugnant to morality. We should not see this in terms of money - we should act on principle."
The meeting turned to the issue of race, with Mentor and MPs asking why only white pensioners attended the meeting.
Benwell responded that the group referred to as the Black Widows, whose husbands had worked for the company, wanted to send representatives but could not afford to pay their own way to Cape Town.
Mentor ordered Transnet to fly representatives of the Black Widows to the next committee meeting on the issue in a month's time, where she said treasury and the department of public enterprises would be asked to give their views.
- Sapa
Committee chair Vytjie Mentor said she would give Transnet a few weeks to find a way of increasing the pensions - which are fixed at an annual increase of 2% - or get parliament to vote a change to the law that limits increases to the below-inflation figure.
"I think we will conclude this issue before the medium-term budget framework," due in October, Mentor told MPs after hearing submissions by Transnet and disgruntled pensioners.
"We cannot allow a situation where people are impoverishing because of a law of parliament. We have a constitutional obligation to look into this."
At the heart of the issue is the fairness of an appendix to the Transnet Pension Fund Amendment Act, voted in 10 years ago, which limited annual increases to payouts to members of the Transnet Second Defined Pension Benefit Fund (TSDBF) to 2%
This has translated into an average pension of R2 833 per month for the fund's 79 400 dependants. Many struggle to cope with a medical contribution of just over R200 per month, while the entire pension of some came to about R220, according to the president of the SA Association of Retired Persons, former Transnet employee John Benwell.
"We repeatedly hear that pensioners are relying on one meal a day or less," he told the committee.
"All we ask is that pensions be adjusted in line with inflation. The rules should be adjusted accordingly and the money provided for this by the state or by Transnet."
His concerns were echoed by ANC MP Mlindi Nhanha, who said his aunt received a monthly pension of R350 as the widow of a man who had worked for Spoornet for more than 40 years.
Transnet representatives said the pension fund, which started life in 1990 with an inherited deficit of R17bn but was financially sound at the moment, would need an injection of close to R20bn if pension increases were linked to CPI inflation and the adjustment was made retroactive.
"We cannot afford that," Vuyo Kahla from the office of the group chief executive of Transnet told the committee.
He said Transnet has for years grappled with the issue but could not resolve it without the intervention of the minister of public enterprises or treasury.
"We need other players that are higher than us."
Helen Walsh, head of group taxation at Transnet, said the stability of the fund had been ensured by immunising the majority of its investments to ensure guaranteed returns up to 2021.
It received an injection of about R3bn when Transnet sold its stake in the V&A Waterfront in Cape Town, and had received ex-gratia capital from the company.
But she warned that trying to raise the rate of annual pension increases to even half the CPI figure could see pensioners lose the bonuses that are paid to them on an ad-hoc basis.
The TSDBF is a closed fund, comprised of those pensioners who were dependent in 1990 when the company was corporatised. Its membership decreases annually by nearly 3 000 as members die.
Inkatha Freedom Party MP Mario Oriani-Ambrosini pointed out that random bonuses were an inadequate measure to address the dire needs of pensioners, more so because they did not count towards the sum on which the annual 2% increase was calculated.
He pleaded that the issue should be seen in humanitarian and not financial terms.
"This is repugnant to morality. We should not see this in terms of money - we should act on principle."
The meeting turned to the issue of race, with Mentor and MPs asking why only white pensioners attended the meeting.
Benwell responded that the group referred to as the Black Widows, whose husbands had worked for the company, wanted to send representatives but could not afford to pay their own way to Cape Town.
Mentor ordered Transnet to fly representatives of the Black Widows to the next committee meeting on the issue in a month's time, where she said treasury and the department of public enterprises would be asked to give their views.
- Sapa
