Transnet pensioners obtain some redress

Court approves settlement agreement.
The appalling treatment of the pensioners is highlighted by the fact that the number of beneficiaries dropped from over 100 000 in 2001 to just under 50 000 in 2018. Image: Shutterstock

The Transnet pensioners who were wronged as far back as 2004 have at last achieved some redress. At least, those who are still alive have.

Short-paying those who are in their sunset years, many of them tired and ailing, is simply unforgivable.

The macabre aspect to this long drawn-out matter is that the 100 959 beneficiaries of the Transnet Second Defined Benefit Fund (TSDBF) at March 2001 had dropped to 49 908 at March 31, 2018.

The full background to this matter was set out in a Moneyweb article on May 11, 2018.


Protracted class action litigation

The pensioners’ class was certified on July 31, 2014. It consists of 52 000 members. The class issued summons against the Transnet Pension Fund (TPF), the TSDBF and Transnet in 2015. The intervening six years have been taken up by protracted expensive litigation.

The Supreme Court of Appeal turned down the pensioners’ leave to appeal, but in 2018 the Constitutional Court (Pretorius and Another v Transnet Pension Fund and Another) gave the pensioners the go-ahead.

Without the funds accepting liability, the parties agreed to settlement negotiations and a settlement agreement was concluded in December 11, 2019.

Settlement offer made order of court

The court was approached to make the settlement offer an order of court.

The court agreed to apply the two-stage process to all settlements, and on February 18 granted an ex parte order with a rule nisi inviting any objections. These were communicated to members and published in the press and on Transnet’s website.

The court had to consider various objections that were raised, including that the benefits to be paid to the pensioners were not sufficient, deceased estates were excluded, no payments were to be made in respect of the alleged historical underpayments, and, if the funds had not been looted, the increases could have been paid.

Developing the common law

The court observed that it had a duty to develop the common law taking into account the interest of justice, be fair and reasonable, and that “the interests of the class members are paramount and not that of the class representatives and their legal teams”.

Professor Theo Broodryk, associate professor and head of the Stellenbosch University Law Clinic, commented that: “Although class actions were first recognised in South Africa more than 25 years ago in the interim constitution of 1993, it is an area of law that remains largely unregulated by statute or court rules. Legislative inaction has compelled the judiciary to step in and, through case law, to develop a structure for the adjudication of class actions.

“The role that our courts have played in this regard is important, especially in view of the recent increase in the incidence of class actions. In the Transnet judgment, Potterill J continued to develop the law regarding class actions and the judgment will likely constitute an important source of authority on the issue of class action settlement going forward.”

Settlement agreement

The settlement agreement was made an order of court on June 22.

Special awards

In December 2019 an amount of R10 000 less tax was made to each member. Two further payments of R10 000 less tax will be made to each pensioner in December 2020 and 2021.

South African Airways (SAA) still has to approve payments from the SAA sub-fund.

The boards of the TPF and TSDBF “may grant additional or greater lump sum awards if their rules are amended to allow them to do so”.

Pension increases

The minimum annual 2% increase will continue, and the TPF, TSDBF and Passenger Rail Agency of South Africa sub-funds will increase the amounts of the pensions payable by 11% on or by the end of the second month following the month on which the effective date of the settlement falls, and by 7% and 4% respectively in each of the succeeding anniversaries of the enhancement.

The SAA sub-fund pensioners will be paid a once-off increase to bring the pensions to where they would have been had they been awarded the 70% year-on-year inflation adjustment.

In subsequent years, the TPF and TSDBF will pay an annual increase (inclusive of the 2% minimum increase) of 70% of inflation.

The end of the saga

The pensioners had no option but to pursue the class action route, despite the risk of litigation.

The promise of the increase to match 70% of inflation was made in 1989, and broken in 2004.

The class action was only certified in 2014. Judge Potterill, Acting Deputy Judge-President of the High Court, pointed out that: “This renders witnesses herein vulnerable to memory issues … [or] passing away before testimony commences or is finalised.”

Potterill further opined that the settlement won’t restore the pensioners to a comfortable retirement, but that it “provides sufficient value to the class members in surrendering their right to litigation”.


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So how many people died while this protracted case dragged on through the courts ? Our legal system is a disgrace in that urgent matters involving people’s health can get tied up for so many years. The accusations of looting of this fund, given our history, would have been 100% true. With this settlement no charges will ever be brought by anyone.

What an absolute disgrace. Do the maths yourselves. The pensioners were wronged in 2004. Now we have 2020 which is some 192 months later. So divide the staggered payment of R30K (over three years) by 192 and you get a measly R156.00 per month in “back payment”.(for those that have survived anyway)
I am speechless.

This saga could and should have been addressed more efficiently and effectively by the courts.

What is most concerning about this whole protracted redress matter, is that the public regulator who commands pension funds never intervened in the interest of the pensioners, stood on the sideline all this prolonged period and never fulfilled its fiduciary duty in this regard. That being the FSCA (or FSB as they were previously known). Utterly shameful.

whatever settlement is reached or negotiated with transnet, for my dad who was a very much pro transnet employee (marketing and business division)it is just too late now to reap any advantages – he passed away at age of 94 years 2 days ago. alltough he was always hoping for a positive outcome in the transnet negotiations, where he is now, money has no role to play.

Condolences Johannes, a bloody disgrace but this is becoming the norm.

Thanks pwgg

The transient pensioners were treated shamefully. Learn from this people – this was done by an organ of State. The same will happen to your pensions if the greedy ANC get their hands on your pension fund monies for ” infrastructure developement”.

This communist government wants Everything You Own!

The agreement was broken in 2004. Just go and Google who was CEO of Transnet in 2004!

Shameful treatment of the elderly is a trademark of African goverments, very much the opposite of their loudly proclaimed ‘ubuntu’.

Damn disgusting. This has been a drawn out saga. Court of appeal turned them down. I read somewhere that Maria Ramos had a negative effect at the time she was with Transnet regarding the funds. I know of Pensioners even now in their 80’s living hand to mouth eating soup, cheap cut meats to make a pot of stew for the week. This is the outcome for employees who had more than 40 years service getting 2% increases a year if they were lucky. The winners were the lawyers and Transnet.

Shame on you,


This will forever be a disgrace to the management of Transnet and our government for not intervening in this blatant theft and neglect of the elderly.
Our present government is contemplating exactly the same thing by targeting pension funds and the most vulnerable to solve their financial problems.
Worldwide destruction of pensioners income is done in a more subtle way. Destroying the value of money by creating paper money, extremely low interest rates and planned inflation is the civilized way of destroying pensioners income. The veneer of civilization is often very thin.

Your sentence, “Short-paying those who are in their sunset years, many of them tired and ailing, is simply unforgivable” says it all!

Shocking. Shameful. But, mostly, Sad. Really Sad.
I am ashamed of treating pensioners this way… and I do not even have anything to do with it.

Bloody psychopaths!

‘’No brilliance is needed in the law. Nothing but common sense, and relatively clean fingernails’’

(Sir) John Mortimer (1923 2009)

These are my views:
Shocking, shocking – but not only Transnet but also our so-called legal system. ‘’The macabre aspect to this long-drawn-out matter is that the 100 959 beneficiaries of the Transnet Second Defined Benefit Fund (TSDBF) at March 2001 had dropped to 49 908 at March 31, 2018’’
This was, is and will always be a very serious contentious issue – pensioners getting screwed out of their pension money – it’s a heinous crime especially when you know that you are dealing with fragile people.
How it is possible that such a heinous crime can take more than 15 years before the highest court is in a position to rule on it! What does that say about our High Courts and the Supreme Court of Appeal that turned down the pensioners’ leave to appeal? If the Appeals court can’t make a simple call why did they block the class action from going to the Constitutional courts?
There is absolutely nothing wrong with the laws in sunny SA – it’s the interpretation thereof that is currently making a mockery of our legal system. It’s become a rule of thumb that almost all High Court decisions end being appealed!
Let’s see if this post can past the ‘’ moderator’’ – lately we seem to have a big difference of opinion!

My mother-in-law (widow of a Transnet pensioner) is in her eighties, and she is looking forward to the implementation of this settlement. I understand some people are not happy about it. But no settlement is ever perfect as both side have to compromise. I calculated in Excel what my MIL’s pension would have been if the 70% of inflation increases had been kept. I checked the inflation rate from 2004 to 2019. I was surprised to see how little more she would have gotten if Transnet had kept their 1989 promise. According to my calculations, when this settlement is fully implemented by 2022, she will get about 91% of the pension that she should have gotten. The previous bonuses and the R30 000 lump sums over the 3 years will help compensate pensioners for what they did not received since 2004. All the sums done it is not a bad settlement at all. It must be remember that the average age of pensioners is 79 years, if the settlement was rejected then most pensioners would have died never benefiting at all. Given the circumstances this settlement proposal is fair and reasonable and is in the best interest of all pensioners.

Mark it is probably the best deal that can be obtained under the circumstances for the remaining pensioners. However it is still a disgrace because I am sure that the issue was deliberately dragged out in court with many delaying tactics. Simply because the longer it dragged on the more pensioners that died and the less transnet had to pay out. I think it is an example of crime paying i.e. short change 100% of the population and negotiate a realistic settlement with the 50% surviving and a fortune is made by someone.

Transnet is government owned, so the government is ultimately responsible for the decisions Transnet takes. This delay and the cost of the court action is just a ploy by government not to pay money where it is owed so that the funds can be distributed to selected cadre in the form of theft and/or corruption. Our government should hang their head in shame at how they have manipulated and treated their pensioners and the aged population linked to Transnet. No amount of apologies are acceptable.

As far as South Africa’s judicial system is concerned, it sucks and needs a complete overhaul. Almost all cases in this country drag on and on and on. The lawyers blame the courts, the courts blame the litigants, the litigants blame the lawyers and advocates, and while all this is going on, the legal people are making money hand over fist. We the people are ripped off with legal costs all the time. Even the most useless lawyers charge an arm and a leg for simple work. Shame on you in the judicial system. You all suck.

Lets not forget that the professionals and trustees from the Transnet pension fund have been since doing their rounds at other famous pension funds around the country. Think Telkom, Eskom, GEPF, Mines and some local government funds.

One of many despicable legacies of the ANC led government. Shame on you!

End of comments.





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