Christmas bonanza for Transnet pensioners

Cape Town – After a parliamentary struggle lasting almost two years Transnet’s beleaguered pensioners will soon have relief.

By December 1 pensioners are likely to receive an ex-gratia bonus equal to one month’s pension.

By end-March next year pensioners with Transnet’s Second Defined Benefit Fund (TSDBF) are expected to receive another two bonus payments.

This will mean that the fund will pay out R850m from its surplus of R2.7bn over the next three to four months.

In November 2010 parliament instructed Transnet and the TSDBF to pay struggling pensioners five months' worth of pension.

At least 40% of the 78 000 or so pensioners receive less than R1 500 a month.

On Friday TSDBF Board of Trustees chairperson Peter Moyo, who is also a Transnet director, told the portfolio committee for public enterprises that similar payments had been made in November 2010 and February 2011 in accordance with parliamentary directives.

By the end of March all five payments are therefore expected to be finalised.

Parliament also gave orders for the granting of an increase equal to 75% of the inflation rate.

In terms of the latest funding solution, based on an inflation rate of 6%, Moyo said the fund would try to pay an increase of 63% to 68% of the inflation rate, instead of the statutory obligatory 2% annual increase.

Although in principle the target is 68% of the inflation rate, increases will not immediately be at that level.

The expectation is that this increase (the portion above 2%) will in time build up so that it is later possible to aim for an increase of 75% of the inflation rate and pay ad hoc bonuses if the fund does well.

The fund expects its solvency reserve (the required capital that has to be kept as deposits) to reduce over time.

This, together with anticipated above-average performance by its assets, will mean that it looks toward an increase of 75%.

Surpluses exceeding the amount needed for this could then be paid out as bonuses.

The increase is expected to cost R2.7bn.

Parliament's directive for a 3.21% increase in the basic pension falls away for now, as the fund cannot afford it.

Transnet stressed its inability to inject any money into the fund.

Parliament had initially instructed the parastatal to pay R1.96bn into the fund to finance the increases and payments.

Dr Manie van Dyk (DA) said that this was just the beginning and he would ensure that the matter remained on the parliamentary agenda.

The bonus payments and increases can be made in terms of the fund's existing bonus rules.

The other Transnet pensioners’ fund, the Transport Fund, the Transport Fund, will also receive an additional five months’ pension payout.

This fund, which is also subject to the 2% rule, will also aim for a 75% increase, depending on affordability.

The fund’s administrator, Metropolitan, can be contacted on?011?587?8200. 

 - Sake24

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