Transnet pension funds’ R100bn dagger pointed at the heart of SA

R100 billion – that’s what Transnet owes pensioners, who are dying off at the rate of 300 to 400 a month.
The are 30 000 fewer pensioners today than there were when the court case began 10 years ago. Picture: Shutterstock

Transnet pensioners have fought a decade-long battle to get their former employer to cough up an estimated R100 billion in benefits as a result of a 1989 promise made in the dying years of apartheid as Transnet assumed the legal responsibilities of SA National Transport Services.

This staggering sum of money is sufficient to sink the economy should Transnet lose the case, says Advocate Anton Alberts, chairperson of the Freedom Front Plus, which has campaigned on behalf of pensioners. “Transnet is holding the country to ransom. If they lose this case, SA is finished. We will straight away be downgraded to junk.”

Not that Transnet would have to pay out R100 billion in one go. But it would have to fork out several billion rands a year to top up the pension funds, putting additional strain on its already tattered balance sheet.

While the case has careened through the courts, the number of pensioners has declined from 80 000 to 50 000. According to some estimates, they are dying off at the rate of 300 to 400 a month. The question some pensioners are asking is whether there will be any pensioners alive to witness the successful conclusion of the case.

The case originates with a promise made by management in 1989 to top up the pension funds by 70% of the rate of inflation plus 2% each year, as was the case in the years prior. This promise was upheld until 2003 when all but the 2% annual payments were stopped. With inflation running at about 6%, this meant pensioners’ benefits were sliding back at the rate of about 4% a year. The pensioners’ lawyers, based on 2013 figures, claimed 80% of pensioners were receiving less than R4 000 a month.

“Some pensioners have nothing left at the end of the month after paying their medical bills. Now it seems that Transnet is reneging on its responsibility,” says one of the pensioners, Nicky Oelofse.

Transnet has fought the case every inch of the way, first by contesting the right of pensioners to be recognised as a class of claimants with substantially similar arguments. The case has been mired in technical argument and exceptions raised by Transnet, all of which were struck down in the Constitutional Court in April. The ConCourt case dealt mainly with exceptions raised by Transnet, rather than the merits of the pensioners’ claims.

Time running out

Pensioners saw this as a major victory and it looked for a time as if they were close to settling the case a few months ago, as Transnet itself reported to Parliament. But this turned out to be false. This means the case must go back to the High Court for argument. This is likely to happen next year, by which time a few more thousand Transnet pensioners will likely have died.

In a recent update to Transnet pensioners, Alberts said negotiations with Transnet over a settlement had failed, and the case would now proceed to court: “I will also speak with (public enterprises) minister Pravin Gordhan to ascertain why Transnet did not heed his instructions to settle the matter on an equitable basis. It is clear that something is seriously wrong with the board of directors. If Transnet loses the court case they will cause harm to the country’s economy to the point of being downgraded to junk status. Minister Gordhan knows the country can’t survive such an event. Clearly, the board of directors is not acting in your or the country’s interest.

“We will now also have to look at other methods to increase pressure on Transnet. Now more than ever we must not lose faith, but make the pressure on Transnet unbearable.”

Lawyers for the pensioners proposed a settlement they believed was affordable to Transnet and would not place the company or the economy at risk. This involved:

  • A base uplift of approximately 42% for all pensioners
  • Annual increases of 70% of the consumer price index (CPI); the percentage increased on a yearly basis subject to affordability
  • A once-off bonus of R20 000
  • Transnet funding the shortfall by way of a ‘top-up’ annually for about nine years
  • The rules of the funds being amended to address not only governance issues but also the vexed 2% rule.

Alberts says the counter-offer from Transnet was virtually a non-offer. The only points where the two offers matched were the yearly increase of 70% of inflation and bonus payments.

One of the sticking points was the pension funds’ offer to use an R4.5 billion actuarial surplus to top up the fund. “That’s crazy,” says Alberts. “That surplus belongs to the pensioners, not to Transnet, and now the company wants to make a gift of something that does not belong to it.”

With that, negotiations broke down and the lawyers are back in the saddle.

An actuarial valuation in 1989 found that the affected funds were underfunded by R17.6 billion. The then National Party government acknowledged that the debt would have to be paid, but failed to act on this.

SA has a terrible history of corporate raids on pension funds, often by grabbing actuarial surpluses through devious means. Transnet’s pensioners claim with some justification that they are the ones left with the bill for years of abysmal management and corruption at the company.



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This theft of pensioners MONEY by corrupt ANC cares is illegal and a class action suit waiting to happen.

… the article is about the actual class-action suit ALREADY happening

The article makes plain that this problem was not of the ANC’s making; it was largely inherited from the Apartheid regime in that the pension scheme was already grossly underfunded in 1989.

You are absolutely spot on. Firstly it was PW Botha who “borrowed” R 7 billion from the Fund to wage war in Angola. Degenerated from there.
The NATS are to blame – no one else!

were can one get more info about this money “borrowing” by the NATS/PW? It sounds interesting…. although it is not a secret that these NP ministers enriched themselves also at the cost of others.


Yes it’s one of those interesting open secrets that a certain segment of the South-African society just refuse to talk about in relation to the current problems the ANC and the country faces. It is interesting to reflect on what the apartheid government could find money to do and where it chose to take it from.

The scale of the private sector theft ( to say nothing of the public sector misallocation) is a topic that probably wont get very much coverage in the media or by the ANC at large as everyone still seems scared stiff of the surviving members of that ruling class.

sounds more like a hospital pass from the old NP government to the ANC

Get the money back from the Zuptas, close down SAA and privatize some other SOEs and pay these pensioners! What the hell is wrong with you. When a country can’t look after its old people, can’t provide a decent education for its youth and carves up the economy based on skin colour, then you know you have real problems. At least under apartheid, the government took care of two out of three of these issues….
Also under “apartheid” the SOE actually worked and paid their way…..itsnot the pensioners fault that the ANC have stuffed this up. WMC is once again being blamed for mismanagement, incompetence and the bankrupting of this country. Dear oh dear oh dear……
My opinion only.

South-Africa has never really taken care of the large majority of either it’s young or it’s old or really even anyone in between so why should we start not with mostly apartheid era white beneficiaries. Do you not understand that while non of us probably wants to hurt these pensioners these payouts will effectively be used by the reactionary DA as argument that social spending should be lowered to ‘balance’ the budget that was of course never a priority of the apartheid government?

Why is that the ANC should be fiscally responsible by balancing SOE books when the previous government funded them at whatever cost to ensure almost full employment for the white minority while ensuring they had control over vital strategic resources to wage their wars on Southern Africa?

Now since it’s the ANC’s primary voters who suffers most for their economic choices and the prior beneficiaries of the Apartheid system that still benefits ( by not having to pay for the half a century massive head start) who are you angry at if regular people all over the western capitalist world are experiencing the same or worse economic dislocation? You do realize that these are all capitalist societies and that almost non of them are run by leftist parties or by African men, right?

I know of many Pensioners in this plight. It is disgusting. They need a better deal. Time for Pravin Gordhan and the President to step in. After all we have a caring AND. Like he’ll.

Wally Stowe

And what about the millions of South-Africans that had jobs with no pensions back under apartheid and now have to subsist on less than R2000 a month which even the Transnet pensioners are entitled to? Should the state take away those pension plans so that 80 000 Transnet pensioners can benefit given how the odds are that the Transnet pensioners may at least have the extended family wealth ( comparatively) so that their families can mostly take care of them? Why should the same minority group always be allowed to benefit and the apparent expense of the majority or South-Africans?

You do realize that there are many millions of non transnet pensioners and workers that are really experiencing tremendous hardship trough no wrongdoing? Also why is the SOE’s inherited by the ANC perpetually under attack but the underfunded SOE’s of the APartheid government should just pay out? Do you acknowledge the vast double standard and gross hypocrisy that the ANC has to deal with?

I am glad you understand the suffering of the few transnet Pensioners you know and what i want you to do now is imagine the suffering of the millions of others who trough no fault of their own( skin color) are in far worse trouble despite you not knowing about it.

Everyone in this country needs a better deal but some days it seems that the people who has always had the best deal is most unhappy which is of course just another slap in the face of the poor majority who would absolutely change places.

My 92-year old father worked his whole life for Transnet and went on pension in a senior admin position (if he was not in that senior position and himself very conservative when it comes to money, he would have been on the street today) – for the past 32 years he got a 2% pension increase, he had to join a private medical aid – the pathetic Transnet medical aid was always fully used in the first month of the financial year and believe me he is still a very healthy person.
What makes me furious about the whole transnet pension situation is that his main task was always to promote and do marketing for Transnet in long, heavy and container haul transport – that same organisation with a useless management today actually kicks him in the face – it’s attitude is: “you are not actively working for us anymore – look after yourself” while we as incompetent management (there are exceptions like Yvonne Page who refused to deposit R1 billion of transnet money into the bankrupt vbs bank) buy wrong and overpriced locomotives from china to please the gupta brothers now residing / relaxing in dubai getting a kickback out the Chinese deal (overpriced locomotives to the value of R509 000 000) – this same once respected transport organisation simply cannot even look after its pensioners from whom, they easily deducted their monthly pension contribution while they were employees – now delivering as pensioen the bear minimum.

My mom is also one of the 50,000 pensioners getting a 2% pension increase. Your dad probably left Transmed prior to it changing to government hospital cover except if you could be on the most expensive option that is higher than her pension. Limited medical aids were even willing to accept ex-Transmed members. Really shocking that this has been dragged out so long.


The long haul train services had already declined significantly by the 80’s due to under funding by that government and when the ANC inherited they apparently had more pressing priorities and either way can’t the private sector do everything better with long haul trucking? Damned if you do and damned if you do not.

As for the Chinese deal i doubt that worked out especially badly for South-Africa ( gupta’s or not gupta’s ) as the Chinese is trying to buy influence without massive profit strings attached as is the western European/American model. The reason Africa and much of the rest of the world is trying to pivot to China is because the benefits of doing so obvious where as American cooperation seems very much like paying protection money as Libya, Iraq and others have found out.

Of course South-Africa should develop it’s rail infrastructure and build the locomotives themselves but imagine the uproar if the ANC should try to fund that new factories in a State owned enterprise? We all know the private sector can do it better so why not trust the gupta’s ( just the Oppenheimers?) to help us out of the goodness of their private sector hearts? The problem with this whole discussion is that most South-Africans and especially those with apartheid era training in how the media can lie reject the official line that the state can’t better their lot when they experienced how effectively the state could oppress them.

The other segment of the public never experienced state oppression and wont even acknowledge the massive subsidies so they are the one’s who believe that the private sector may yet be wonderful if only the state would let it be. This is despite the state still significantly subsidizing the wealthy segment of the economy and the private sector companies having some of the largest returns on investment in the world.

So i am sorry to hear about your father and all i can say is that whatever his pension the vast majority of pensioners in South-Africa still have it far worse than him despite no wrongdoing on their part or even a deliberate ANC effort to avoid paying them their supposed due’s. At least he understood that the future wasn’t certain by not bargaining on a full pension and used the much higher relative incomes ( they absolutely were) of the 50’s ,60’s, 70’s and even 80’s to create the nest egg that not many had the income to even attempt funding.

ANC(EFF) dagger pointed at the heart of SA….

Behind the scenes they in the same bed together planning the demise of SA.

With George Soros, right after he is done shepherding the caravan over the border? So the Capitalist ANC is a danger to South-Africa in the same way the capitalism is a clear and present danger to every democracy and ever worker?

Why don’t you just say that instead of talking about ANC as if it arrived from another planet with strange new economic ideas… They say the Aparheid government spent 8 or ten times more money on certain kids but by the looks at the state of the public discourse it either wasn’t education or it simply did not work.

A deal is a deal …this arrangement regarding the Transnet Pensioners was one of the fundamental agreements between the Nationalist government and the ANC that resulted in power sharing initially and finally the new South Africa. The ANC have broken the terms of this deal. Simple as that.
But to add insult to injury….the ANC now want to invest in the Nigerian Railways evolution…when even General
Electric are pulling out of because of the cost! Where the hell are we getting the money for this when we can’t even pay out our Transnet pensioners? The poor old taxpayers perhaps? And the very people whose forebearers funded this country from the beginning. It’s a disgrace.

End of comments.




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