Transnet vows to probe claims of Gupta-linked Trillian hedging pension funds | Fin24
 
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Transnet vows to probe claims of Gupta-linked Trillian hedging pension funds

Aug 22 2018 19:39
Khulekani Magubane

Transnet has vowed to get to the bottom of claims that Gupta-linked Trillian leveraged the entity's pension fund to hedge deals for itself.

Speaking to Parliament's portfolio committee on public enterprises, the Transnet delegation also said the entity's leadership was closer than before to a resolution of unpaid funds, which led to the freight rail carrier being the subject of a major class action.

Members of the portfolio committee have received reports that some pensioners were receiving as little as R140 per month from the fund, while others were not getting access to their funds at all. 

Some pensioners passed away without their dependents having access to funds.

Long-term buildup

Professor Edward Kieswetter from Transnet told the committee that in 1990, early in its existence, the Transnet Pension Fund had an actuarial deficit of R17.1bn, meaning 22% of its liabilities were covered by the fund’s investments.

"An amount of R309m was apportioned to Transnet, and there was a further agreement that it would be used to serve pensioners.

"Transnet worked closely with the Department of Public Enterprises to obtain government support for the additional funding of the Transnet Second Defined Benefit Fund, but these discussions were terminated," said Kieswetter.

'Working on it'

Committee member for the African Christian Democratic Party (ACDP) Steve Swart asked Kieswetter about allegations that Gupta-linked Trillian used its position, and certain pension funds, to "hedge itself to secure deals that it entered into".

Kieswetter said Transnet was painfully aware of balancing the real human plight of pensioners and that the utility was not trivialising this at all. Steps had been taken to address the issue, he said. 

"We have made discretionary payments of R523m to members.

"It is driving a change in rules to address the 2% gap in terms of the rules of the fund, and we continue with engagements outside of court as well," Kieswetter said.

"Out of court settlement is a serious attempt to resolve matters in the issue. We would like to hasten that," he added.

The Transnet delegation confirmed some pensioners were getting as little as R140 per month and said they were "working with pensioners to address it".

However, the delegation said Transnet did not make deductions from amounts paid to beneficiaries.

'Could take up to 10 years'

Kieswetter said the class action of 2014 sought an order that Transnet pay the Transnet Pension Fund an amount of R309m with interest from the surplus in 2001.

He said the historical funding deficit of R17.1bn was never a debt due by Transnet, and both the Transnet Pension Fund and the Transnet Second Defined Benefit Fund were both correctly in surplus.

Committee member for the Democratic Alliance, Natasha Mazzone, reminded the Transnet delegation that the pension fund matter went as far as the Constitutional Court and that it was a serious matter affecting people’s lives.

"That money is not going to go anywhere once these people die. This court battle could take up to 10 years and much can change.

"If you are in your eighties you don’t have ten years to wait. Is there no way that this can be settled in a way that doesn’t involve this long, drawn out court battle?" asked Mazzone.

Out of court

Portfolio committee member for the African National Congress Zukile Luyenge said the perpetual suffering of members of this fund was serious and that there was no time to go through court cases while beneficiaries waited.

"Many have already passed on. Is there no arrangement to ensure that the beneficiaries are in your data so that those funds do not remain in the company unclaimed? Is an out of court settlement not possible in the overall dispute?" he asked.

On the Trillian matter, Transnet group CEO Siyabonga Gama said the entity talked to the parties in pension fund and the board was told that they would go to court to retrieve those funds.

Transnet board chair Popo Molefe said: "We are committed to ensuring that the matter of the pensioners is being dealt with in the most humane way possible. The Trillian matter has recently been brought to our attention and we will look at it and, if necessary, incorporate it into current investigations."

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