The transport sector is the lifeblood of the economy, and market forces, socioeconomic impacts and people-centred concerns all play a vital part in the sustainability of the sector.
“Our transport sector is one of the cornerstones of our economy, contributing 17% to the country’s GDP and creating almost 30% of formal employment opportunities,” says Mdumiseni Mabaso, chairman of the Transport Sector Retirement Fund (TSRF).
“These figures underline the direct value the transport industry contributes to the sustainable development of the nation. Without it, our economy would grind to a halt.”
South Africa’s transport sector is an ever-evolving industry that brings dynamic mobility to our society, as it supports the movement of goods and people, both internally and cross-border. In this fluid and fast-changing environment the TSRF aims to be the constant factor within members’ lives, on which they can both rely and depend, whether they are still gainfully employed or retired.
Towards this, the TSRF looks at responsible investing a little differently from many in the retirement fund industry. One of the aspects the fund looks at is how to plough back into ensuring members’ livelihoods are improved while they are employed, and considers a vast array of influences to deliver the best possible service and care to the industry’s role players.
The motive is two-faceted, to bring financial stability to people’s lives and to help gear the country and its people for a bright future.
In 2017, the fund successfully transitioned from the Road Freight and Logistics Industry Provident Fund to what is now known as the Transport Sector Retirement Fund. With this transition, the Fund expanded its sphere of operations to encompass the broader transport sector.
The expansion also resulted in the Fund changing its rules to become an industry umbrella fund offering improved death, disability and funeral cover to its members without increasing their costs.
The original Collective Bargaining Council Agreement was cancelled in 2014. Initially, the fund only covered the road freight and logistics sector, which was limited to transporters (truck drivers) carrying goods for gain. However, within the freight and logistics industry, employees tend to regularly move among the various sectors and employers.
The active movement of employees between job opportunities frequently impacted negatively on their retirement savings, as the scope of some transport companies may have fallen outside of the original jurisdiction of the fund. This meant that members had to withdraw their retirement savings every time they moved jobs.
As an umbrella fund, the TSRF now offers greater stability and security to its members, regardless of where they are employed within the broader industry.
Some of the TSRF’s investment projects include the development of quality truck stops along our country’s major transport nodes, as part of the fund’s impact investment strategy.
“Our aim is to create safe and efficient transport hubs along our major routes. The TSRF is one of investors in the Highway Junction Truck Stop near Harrismith,” explains Mabaso. “Within this joint venture, the facilities at Highway Junction were upgraded and expanded to create the first multi-brand facility of its kind on the continent.”
The Highway Junction is proving so successful that the TSRF is expanding this concept to other regions of South Africa. Sites under consideration and development are in Cape Town, East London, Colesberg, Klerksdorp and Musina.
“Apart from delivering good returns on our investments, our truck stop development programme, as part of the fund’s impact investment strategy, will also go a long way to help alleviate driver fatigue and will ultimately impact positively on general road safety along South Africa’s road networks,” says the TSRF chair.
Some of the fund’s other infrastructure partnerships include the recently opened Philippi JunXion Mall outside Cape Town, and two new mixed-use property developments — one near Sebokeng in the Vaal Triangle and another in the Western Cape, near Simon’s Town.
“These spatial development projects will assist with poverty alleviation, ensuring that property can be accessed by all as an asset for wealth creation,” says Mabaso. “We believe our impact investment strategy is setting the tone for boosting economic growth and maximising investment returns. Within our diversified investment portfolio, these strategic initiatives are offering good returns.
“Our journey to enhance benefits and positively contribute to our members’ lives has culminated in the TSRF receiving the Institute of Retirement Funds Africa’s (IRFA) Best Practice Gold Standard Award earlier this year.”
This award is for meeting all the criteria in the following areas of excellence: governance, transformation, stakeholder engagement and education, investment practice, trustee development and financial management and reporting.
“This prestigious accolade essentially recognises the TSRF as one of the top funds in the country. This is directly attributable to my fellow board members, their visionary approach, due diligence and commitment to improving our members’ livelihoods,” concludes Mabaso.
The TSRF light has shone brightly in 2019
• TSRF’s assets increased from R3-billion in 2013 to R8-billion in 2019, totalling a 65% growth in assets over a six-year period.
• TSRF’s black-owned asset managers handle 75% of the funds under management with a 65% Level 1 BEE compliance rating.
• R916-million in benefits were paid out to members during this year.
• The Fund has an average of 75 000 active members.
• Around 3 000 employers are currently members of the TSRF.
Now that the Transport Sector Retirement Fund has completed its transformation, it holds R8-billion in assets and has achieved a 10% annualised growth on investments.