Transnet pensioners’ R100bn payout a step closer

A hard-won Constitutional Court victory for former Transnet employees has brought the group one step closer in its bid to claim about R100-billion in pension monies owed to them by the state-owned enterprise.

The case represents about 60 000 pensioners, many of whom have found themselves destitute because their Transnet pensions have not kept up with the cost of living.

According to a 2013 estimate by the legal team representing the pensioners, 80% were receiving less than R4 000 a month, 62% less than R2 500 a month and 45% less than R1 600 a month. Some pensioners got only R1 a month after deductions such as contributions to the Transmed Medical Fund.

READ MORE: Transnet (and death) cheat aged pensioners out of dignified lives

When Transnet became the legal successor to South African Transport Services in 1990, about 80 000 pensioners were moved to one of two Transnet pension funds. At the time, the government promised verbally that employee pension fund benefits would not be changed and promised the payouts would keep up with inflation.


But, in 2000, and already undercapitalised by R17-billion, the funds were closed to new contributors and the pension payouts grew well below inflation at just 2% a year.

The legal team claims the legacy debt owed to pensioners (calculated at compound interest of 12% a year) has grown to an estimated R100-billion.

The judgment handed down last week has cleared the way for the pensioners to appeal.

In 2014, the pensioners and their legal team successfully obtained a court order that allowed for the case to go ahead as a class action. But Transnet then successfully obtained an exception to a key part of the claim, which said that, if the government makes a commitment, you needn’t prove that a contract was created.

Last week the Constitutional Court granted leave to appeal the ruling, which upheld this exception and, the judgment noted, the appeal had reasonable prospects of success.

In his judgment, Justice Johan Froneman said the terms of the pleaded contract, although mainly a verbal commitment, “are expressly and clearly set out and so are the parties bound by those terms”.

This week some of the pensioners said they were pleased about the ruling although they remained concerned that the matter was still not finalised. The legal battle has dragged on for years and more than 22 000 pensioners have died.

Anton Alberts, the Freedom Front Plus’s (FF+) chairperson and parliamentary spokesperson on transport, who has lobbied on behalf of the pensioners for years, said in a statement that last month he had informed Public Enterprises Minister Pravin Gordhan of the significant effect such a ruling would have on Transnet and the state. He said the FF+ had now requested Gordhan to meet the legal team soon in the hope of negotiating a quick and fair settlement.

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