Transnet has not yet been served papers relating to the R85 billion class action taken against it by a group of pensioners and so yesterday it was unable to comment on Friday’s application to the North Gauteng High Court.
The pensioners have called on the court to sanction the institution of a class action against two Transnet pension funds and Transnet.
Piet Maritz, the principal officer of the Transnet Second Defined Benefit Fund (TSDBF), told Business Report yesterday that the company would have to look at the legal documents before commenting.
However Maritz did state, contrary to some claims, that both the TSDBF and the Transnet Pension Fund had always paid the annual increases – of 2 percent – due to the members and they had also made a number of bonus payments to members.
News that a group of pensioners belonging to the TSDBF had launched a high court action is the latest development in a saga that dates back to the corporatisation of Transnet, previously SA Transport Services (SATS), in 1990.
The subsequent restructuring of the Transnet Pension Fund into three entities involved a major and ongoing rearrangement of assets and liabilities in a bid to secure the solvency of the pension funds.
The long-running saga includes grim accounts of pensioners forced to survive on less than R2 500 a month.
According to lawyers acting for the pensioners, “the most shocking figure is that 45 percent of pensioners earn less than the state old age pension”. As part of the corporatisation, the government guaranteed all of SATS’s pension obligations, which were estimated to amount to R17.1bn at the time. To redeem the debt owed to the pension fund, Transnet issued T011 stock to the value of R10.4bn at the time of corporatisation.
However, by 1994 it was apparent Transnet could no longer guarantee the financial viability of the pension fund.
The pensioners are arguing in court that both the state and Transnet refused to address their legal obligations to the fund and that the pension obligations now amounted to R80bn. This is termed Transnet’s “legacy debt”.
The pensioners contend that an aggravating factor behind the growth in obligations was the 2001 decision to swop the T011 stock for 75 million M-Cell shares. With regard to this transaction, lawyers for the pensioners state: “The conduct by the investment committee acting in concert with Transnet caused a strain to the fund of R4.9bn.
“In total, T011 bonds worth R7.7bn were cancelled, saving Transnet R1.2bn a year in interest and R7.3bn in redemption payments. The fund failed to get any dividends from these shares as the shares were held in a trust, of which the fund was allegedly a beneficiary.
“The shares were sold in 2006 and the cumulative loss that was suffered by the TSDBF in the process amounts to approximately R5.5bn.”
Lawyers have called on pensioners to indicate support for court action.