- Title
- Challenges of post-apartheid state-owned company pension fund reform: a case study of the controversy around the Transnet-Transport Pension Fund
- Creator
- Goqoza, Noluyolo Juliet
- Date Issued
- 2015
- Date
- 2015
- Type
- text
- Type
- Thesis
- Type
- Masters
- Type
- MSocSc
- Identifier
- http://hdl.handle.net/10962/54766
- Identifier
- vital:26610
- Description
- This thesis examines the restructuring of the pension funds of Transnet, a South African state-owned company involved in transportation, from the 1990s. Two of its main pension funds, the Transport-Transnet Pension sub-Fund (TTPF) and the Transnet Second Defined Benefit Fund (TSDBF), have been surrounded by controversy, with major court actions brought by aggrieved pensioners in 2006-2012 and again from 2013, and smaller cases in 1997-1999 and 2004. (There were also a number of smaller cases, mostly unsuccessful, but the thesis will not examine them). The case that started in 2013 is the biggest class action in the country‟s history, and makes claims of serious mismanagement and bad faith against the Transnet management. But the fundamental grievance is that (according to the 2013 legal case) “more than 80% of pensioners earn less than R4 000.00 a month… 62 % earn less than R2 500.00… 45% of the pensioners earn less than the state‟s ordinary old-age pension” grant for the poor. Although that case is ongoing, this thesis examines the background and controversies that frame the case. It provides an overview of the history and development of the South African pensions system and South African state-owned companies; it examines how these have been shaped by the apartheid and post-apartheid periods, and by the rise of neo-liberalism; it examines the evolution of Transnet and its pensions systems, from the early days of the South African Railways and Harbours Administration (SAR&H, formed 1910), to its restructuring into the South African Transport Services (SATS) in 1982, and then into Transnet in 1990. The thesis shows that the operations of the TTPF and TSDBF, which are closed to new members, have had serious effects on pensioners that rely upon them. Pensions are very low (the main reason for the various court cases), and this is for a range of reasons. Annual increases in pensions are formally set at below-inflation levels, leading to falling real incomes. More pressure on pensioners‟ livelihoods has arisen from Transnet‟s cuts to other benefits, like the medical aid Transmed, provided to pensioners. While the schemes are solvent, the pensions generally started at a low base, partly because most pensioners were relatively poorly paid workers before retirement (and the pensions were linked to former salaries). There is also a racial dimension: while most white workers at SAR&H/ SATS and Transnet were poorly paid, black, Coloured and Indian workers were paid even worse, and, further, were only brought into the pension schemes late. Both TTPF and TSDBF are defined benefit funds, which means members are guaranteed specific benefits at retirement, with the employer obligated to inject funds to meet shortfalls where needed. Yet neither the state nor Transnet has been willing to take actions to lift the basic pensions, such as investments into the funds, or to make systematic ex gratia payments to bring the pensions to a reasonable level, to remove historic racial inequalities between pensioners, to increase medical aid co-payments or coverage or to otherwise address the pensioners‟ situation. It does not seem that the reason for the problems is that the two funds have been severely mismanaged or asset-stripped, as alleged in the 2013 class action: it must be noted that both funds report surpluses. But the surpluses are possible because the pensions are low and falling in real terms, and the numbers of pensioners declining due to deaths. It seems clear that Transnet is unable or unwilling to act to decisively improve the situation of the pensioners: ensuring a surplus on existing pension funds is a major goal. This is partly because Transnet itself has ongoing financial problems, and partly because it operates in the context of neo-liberal restructuring, like corporatisation, commercialisation and privatisation, which places limits on the additional funding of the funds. At the same time, the pensioners have very little real, as opposed to a nominal, say in the administration of the pension schemes, limiting their ability to affect the rules and administration or raise issues. The thesis seeks to use historical institutionalism, which sees policies and major institutions, including state-owned companies, as shaped by power and conflict, especially between classes. This is used to try and explain changing state policies and the changing role and actions of state-owned companies, as a way of understanding Transnet‟s actions, as well as its treatment of its pensioners.
- Format
- Format
- 128 leaves
- Publisher
- Rhodes University
- Publisher
- Faculty of Humanities, Sociology
- Language
- English
- Rights
- Goqoza, Noluyolo Juliet
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