COSATU Comments on the Transnet Pension Fund Amendment Bill Submitted to the Department of Public Enterprises, 23 August 2000

 

COSATU has examined the above Bill and Rules which have been published for public comment. In this submission to the Department of Public Enterprises we will not be commenting on the Bill in its entirety nor on the principles underlying it. We reserve our right to do so at a later stage. At this point we would like to comment on one specific issue of relevance to the Bill, one aspect of the Rules, and furthermore to pose several questions to the Department which will assist in clarifying us and guiding our future approach to the Bill.

COSATU acknowledges the problem of Transnet's debt burden and the constraints which this could pose for Transnet fulfilling its public mandate in terms of service delivery. We believe that this issue needs to be resolved in a way which is not detrimental to users of Transnet's basic services nor to Transnet's current or previous employees. The issue of the Transnet debt, and of Transnet's restructuring in general, needs to be approached from a perspective of better equipping it to meet commuters' needs and to provide the transport infrastructure necessary for South Africa's economic development. COSATU is opposed to wholesale restructuring of Transnet. Were public resources to be injected into Transnet to deal with the debt burden or other aspects of restructuring, these should be an investment into Transnet better fulfilling its public mandate and not an effective subsidisation of future private shareholders or partial owners.

The specific issue which COSATU wishes to raise of relevance to the Transnet Pension Fund is with respect to (past or current) employees of Transnet who were not classified as full employees for some or part of their employment with Transnet. Our understanding is that these people have been severely discriminated against purely on the basis of race, and up to today are in a significantly worse position than white (past or current) employees in otherwise similar circumstances. This is an untenable position and needs to addressed as part of dealing with the apartheid legacy. Whilst we may not be in possession of sufficient technical information to make specific proposals at this stage, COSATU believes that the restructuring of Transnet's pension fund arrangements provides an opportunity for dealing with this problem. The onus is on Transnet to table proposals for compensating affected employees, while cognisance is of course taken of the need for Transnet to fulfil its public mandate as discussed above.

In terms of the Rules referred to the Bill, COSATU would like to comment on clause 5 in particular, which stipulates that “The Board of Trustees shall comprise six Trustees and their alternates appointed by the employer of which two trustees and their alternates shall be appointed from amongst Pensioners.” It is completely unacceptable to exclude workers from the Board of Trustees and COSATU believes that this provision is not even in line with general legislation on pension funds. Our understanding is that the current Board of Trustees is 50% labour and 50% management and it is incomprehensible to us why it is proposed that the employer alone should appoint trustees. COSATU proposes the amendment of this clause to provide for 50% : 50% representation for labour and management.

Finally, we would like clarity from the Department on the following questions of relevance to the issue at hand:

1. What, if any, is the relationship between the changes in the Transnet pension fund and any proposed or contemplated restructuring, and specifically any proposed or contemplated privatisation or Transnet?

2. What, if any, is the relationship between restructuring of the Transnet pension fund and overall debt burden and the recently reported transaction with the PIC?

3. According to projections by Transnet and the Department, what will the likely effect of the proposed changes be on affected employees when they retire?

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