UPDATE: Glimmer in the Transet tunnel

A combined summons has finally been issued against South Africa’s national transport monopoly, Transnet, by about 60,000 impoverished pensioners who, for over a decade, have received piffling 2% annual increases on their generally miniscule pensions.

The class-action summons issued by first plaintiff Johan Pretorius of Bloemfontein and second plaintiff Johan Kruger of Pretoria – both pensioners – draws a new element into the case. This involves the discovery of a remarkable R310 million “donation” given by the trustees of one of Transnet’s pension funds, the Transport Fund, to Transnet.

According to the papers this “donation” was 40% of its members’ supposed pension fund surplus, which totalled R632m at the time. The donation was confirmed in a document signed on 23 November 2000 at Johannesburg by the  trustees and paid over on 7 March 2001. According to the document, “the intention is to innovatively use Transnet’s share of the surplus to enhance [this] fund and improve the relationship between Transnet and the members of [this] fund. The ultimate decision regarding the use of Transnet’s share of the surplus will rest with the board of Transnet.”

There is no evidence that it was ever used to benefit the pension fund.

Counsel for the pensioners argue that this donation was unlawful because the trustees did not have the power to make it. They also argue that the trustees made the donation in breach of their fiduciary duty to act in the best interests of the Transport Fund and its members. They argue that Transnet is liable to repay this amount to the fund.

The summons and particulars of claim are signed by advocates Wim Trengove SC, Jaap Cilliers SC and Leon Kellerman.

The Transport Fund (TF) has a number of sub-funds. They are the South African Airways Sub-fund; the Transnet Pension Fund Sub-Fund; and the Passenger Rail Agency of South Africa Sub-fund. Worth noting: all the funds are administered from Transnet’s offices in Johannesburg.

The TF itself was a merger of the “New Railways and Harbours Superannuation Fund (the so-called “White Fund”) created under the Railways and Harbours Superannuation Fund Act 24 of 1925, and the Railways and Harbours Pension Fund for Non-White Employees (the “Black Fund”) established under the Railways and Harbours Pensions for Non-Whites Act 43 of 1974. The latter two funds were merged into the TF in 1990.

The second defendant is the Transnet Second Defined Benefit Fund (TSDBF), a pension fund established on 1 November 2000. The third defendant is Transnet Limited.

In the summons, reference is made to “the legacy debt”. The pensioners’ lawyers say the SAR&H and SATS – forerunners of Transnet – had an obligation to pay the white and black funds “such amounts as were necessary to maintain them in sound financial condition”. The State Actuary determined this debt to be R17.18 billion plus interest from 1 April 1990.

Freedom Front Plus MP Anton Alberts

The lawyers argue that the Transport Fund and the Second Fund (the TSDBF) inherited the right to receive the legacy debt in the respective proportions of 43.1% and 56.9%. In 1990 Transnet issued so-called “TO11” bonds to the value of R10.3bn in favour of the Transport Fund. The Second Fund apparently received a pro rata share of these bonds from the Transport Fund. But in February 2001 Transnet, the Transport Fund, and the Second Fund inexplicably agreed to cancel the bonds without receiving any payment.

Most of the Transnet pensioners are battling financially and are desperate, having received inflation adjustments of only 2% each year since 2003. Inflation has seen to it that their real earnings now are worth half what they were getting when they first retired, even though, with age, their medical costs have doubled.

Transnet has been asset stripping the pensioners for two decades. About 62% of the pensioners are receiving less than R2,500 a month. Some get as little as R200 a month. The average age of the pensioners is 77, their average pension is a mere R2,850 a month.

Freedom Front Plus MP Anton Alberts, who has led the battle in Parliament for the embattled pensioners, said it is good news that summons has been issued – by attorneys Geyser Coetzee. He believed that when the high courts sit again at the end of July after their recess, a court date could be applied for.

Transnet and its shareholder, the government, are expected to continue employing legal delaying tactics as their prime defence strategy, he! he! he!

The pensioners have come to expect nothing else, having seen their last years tick by in ever-greater poverty.

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