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Freedom Front Plus to take on Transnet

Jul 20 2012 17:09 Sapa

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Johannesburg - Freedom Front Plus (FF Plus) preparations for a class action against Transnet and its two pension funds are "at an advanced stage", its parliamentary spokesman Anton Alberts said on Friday.

"We are still waiting for information from the pension funds to finalise the application," he said in a statement.

The party planned to bring the application next month to force Transnet to implement annual increases equivalent to inflation, to compensate pensioners for a decade of below-inflation payments and to ensure the funds were sustainable.

Earlier this week the FF Plus sent legal letters to Transnet for information about its two pension funds, said Alberts.

The party sought the minutes of all meetings held since 1994, and all financial statements.

Transnet has two pension funds: the Transnet Pension Fund and the Transnet Second Defined Benefit Pension Fund.

These were created in 2000 from a predecessor fund with a history of financial hardship.

Since their inception, the pension funds had increased benefits by just 2% per year, well below the inflation rate. Over the years many pensioners had fallen into poverty as a result of the low increases.

"We are... working as fast as possible on the case given the desperate position of the pensioners," Alberts said.

"As soon as the application has been submitted we will be informing everybody, and also launch public protest action (on behalf) of the pensioners."

In 2010 Parliament instructed Transnet and the National Treasury to inject R1.9bn into the pension funds.

The funds would then pay out five months' worth of pension payments and increase payments by a base amount of 3.21%.

From that point, annual increases would be 75% of the consumer inflation rate. Both Transnet and the Treasury had previously agreed these increases were affordable, Alberts said.

Subsequently, the Treasury had said it had not budgeted for the funding instruction and could not afford it.

Last year, Transnet told Parliament it could afford an annual increase of only between 63% and 68% of consumer inflation.

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freedom front plus  |  transnet  |  strike  |  pension


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