Cape Town - After years of calling for inflation-linked annual increases, Transnet Second Defined Pension Fund (TSDBF) pensioners may at last see an increase close to 75% of the Consumer Price Index (CPI).
The CPI measured changes in the price level of consumer goods and services purchased by households.
The TSDFB told MPs on Friday that it would now pay the pensioners an annual increase of between 63 and 68% of the CPI.
It said that its target was to reach 75% of the CPI, but that would largely depend on the performance of the fund.
The TSDBF is one of the biggest pension funds in South Africa. It's a closed pension fund with more than 80 000 members, all of whom are former Transnet workers who retired before or in 1990.
The average amount that TSDBF pensioners reportedly receive was R2 833 a month.
Since 2002, the pensioners are said to have been unhappy because their annual increases have been limited to 2% a year as the pension fund assets could not afford more.
The matter has been before Parliament's Portfolio Committee on Public Enterprise for the last 18 months.
The committee has since tabled proposals to the stakeholders in order to have the matter sorted out to the benefit of the pensioners.
The committee wanted a five-month pension payback, future pension increases to be pegged at 75% of the CPI and also a once off 3.2% base uplift in pension.
Transnet Director and fund chairperson Peter Moyo said if this proposal was implemented, it would have exhausted the current surplus and required an additional cash injection of R2 billion.
Moyo said of the five months pension back pay, two had already been paid out and the rest would be met before March next year. He told the committee that they could afford 63% of the CPI which would be increased to 68% should there be investment returns.
Depending on the performance of the fund, he said they would try to reach 75%.
He said the intention was to implement the proposal at a cost of R2.7 billion. Moyo underlined that increases were subject to affordability.
A larger portion of the committee members seemed happy with the resolution but indicated that they would want to keep working on the matter for the benefit of the pensioners.
