Mdumisani Mabaso. (Photo: Clinton Friedman)
In a fluid and fast-changing transport environment, the Transport Sector Retirement Fund (TSRF) is aiming to be the factor within members’ lives that is constant and on which they can always rely, both while they are working and when they are retired.
South Africa’s transport sector contributes 17% to the country’s GDP and creates almost 30% of formal employment, an indication of the direct value that transport contributes to the sustainable development of the nation. According to the United Nations (UN), without sustainable transport, there will be no lasting progress on climate action or Sustainable Development Goals.
The transport sector is an enabler — it enables trade, commerce, tourism, economic growth and gives people access to jobs, services, education, medicine, entertainment, sport and social interaction — all of which contributes to a dynamic country where citizens can live productive, positive lives.
In South Africa, road transport is, without a doubt, one of the cornerstones of our economy. Without it our economy would grind to a halt.
According to the chairman of the fund, Mdumisani Mabaso, the TSRF understands that effective stakeholder engagement is critical for the fund to consistently excel in its endeavours to be a sustainable and dependable factor in members’ lives, and for the fund to keep growing.
“As a means of driving effective stakeholder engagement, the TSRF maintains a database of 63 000 (up from 48 000 in 2017) for its 70 000 members, and effectively utilises cellphone technology to regularly engage, inform and educate members. Our regular newsletters, newsflashes, and scribbled videos are firm favourites.
“In addition we have walk-in claim and benefit counselling service-centres, and have teams that visit employers to conduct face-to-face communication with members. In fact, we have expanded our face-to-face communication by regularly visiting the Harrismith Highway Junction Truck Stop, which receives between 800 and 2 000 trucks a day, to speak with members outside of the employer setting,” says Mabaso.
The Fund changed its name in 2017 from the Road Freight and Logistics Industry Provident Fund to the Transport Sector Retirement Fund, to expand the fund’s sphere of operations to encompass the broader transport sector.
“We also changed our rules (and improved death, disability and funeral cover without an increase in cost) to become an industry umbrella fund after the cancellation of the Collective Bargaining Agreement in 2014,” explains Mabaso.
“The fund originally only covered the road freight and logistics sector, which is limited to transporters carrying other people’s goods for gain. But we have noted extensive movement in the industry among our members, most of whom are truck drivers and can work in any one of the many sectors in the transport industry. This movement negatively affected members’ retirement savings. Previously, they had to withdraw their retirement savings when they changed jobs and moved to a transport company outside of our jurisdiction.”
Mabaso says that besides the TSRF’s goal of ensuring that once members retire their living standards are maintained, the fund continually looks for ways to improve members’ livelihoods while they are still actively employed.
The fund recognises that 80% of its members are truck drivers, and as a proactive solution to the negative state of affairs on the country’s roads due to driver fatigue, the fund has developed a responsible investment strategy to build truck stops. These ensure that members and the broader transport sector community are able to park and sleep safely, and also have access to accommodation, shopping, restrooms and showers, fuel, primary healthcare facilities and a restaurant — all in a secure setting.
Joe Letswalo, principal officer at TSRF, says: “The first in fund’s truck stop investment strategy was the Harrismith Highway Junction Truck Stop, which is one of four truck stops we plan to roll out over the next 18 months, and is the biggest in Africa. It boasts three forecourts (Total, BP and Engen). Over the last 12 months, the Harrismith Highway Junction provided a 25% return on investment.”
He says TSRF differentiates itself from many other funds by its single-minded drive to benefit members. The fund’s shareholders are its members. The fund is non-aligned and is a standalone, which helps to maximise members’ returns. All the proceeds of the fund’s activities are reinvested, ultimately benefiting members’ retirement savings.
“For example, through the fund’s self-insurance, it has generated in excess of R500-million. Had the fund obtained insurance from a private insurance company, this would have gone into the profits of that organisation, but we were able to retain it, thereby improving members’ savings and increasing their benefits.
“The fund recently improved members’ death and disability benefits from two-times annual salary to three-times annual salary, and funeral cover from R30 000 to R50 000 for each member and spouse, which was made possible by the fund’s very strict non-profit orientation, increasing members’ benefits by ploughing profits back into the fund. This was done at no increase in costs to members,” says Letswalo.
Due to the nature of the fund, the level of unionisation of the members, the diversity of employers, and the number of service providers in the fund, the TSRF has many unique challenges not faced by stand-alone funds with one employer or self-administered funds. Letswalo says overcoming these challenges has resulted in TSRF developing a number of best practices in its daily operations.
The TSRF services 2 157 employers, of which 80% are small employers and owner-driver businesses that employ less than three staff members. To educate these employers scattered throughout the country on the fund’s processes and benefits, when there is no formal human resources or payroll function, remains an ongoing challenge. Therefore, the fund believes its bi-annual employer newsletters and monthly employer visits conducted by fund consultants are industry best practice. In the year under review 800 employers were visited and training was provided to employers and members regarding fund benefits and the new life stage investment strategy.
“Likewise, from a compliance point of view we believe our Section 13A compliance (payment of contributions) is a best practice as the fund (after three years) now has 99% compliance, despite the unique challenges faced due to a staff turnover of approximately 50% every year in the transport industry, which makes it difficult for transport industry employers to maintain accurate employee data, pay contributions over before the Section 13A due date, and complete their reconciliations,” says Letswalo.
“From a transformation and investment perspective we believe the truck stop development, which is not only sustainable, but a unique asset class, is a best practice and will have a positive influence within the communities that they are located in.
“The Highway Junction Truck Stop is now one of the largest employers in Harrismith, employing 200 locals. This investment forms part of our alternatives allocation in terms of our investment strategy and is compliant with Regulation 28.
“We believe our stakeholder engagement and education programme is also best practice, as it overcomes the significant challenge of 80% of members being truck drivers and highly mobile within the broader trucking industry. Their mobility demands new and creative approaches to best utilise traditional channels and media platforms in order to effectively reach our members.
“The challenge was overcome by forcing employers to provide cellphone numbers for members via their Sect 13A process and by uploading all communication on the fund’s website and Facebook pages, and sending a link to the documents via SMS to members’ phones. Most members can therefore read and view fund communication on their cellphones. Research showed that 66% of members have access to the internet via their smart phones.
“Lastly, we believe our ‘Truckers Unite Against Human Trafficking’ awareness campaign, which we implemented together with our administrator, Salt Employee Benefits, is a best practice as it speaks to the fund being a responsible corporate citizen and using its membership base to fight this heinous crime, thus making South Africa a safer place,” says Letswalo.