Madame Speaker,

The Transnet Pension Fund Amendment Bill is a direct result of the restructuring process at Transnet and in particular the strategic disposal of non-core assets, to refocus Transnet into a rail transport and infrastructure company that can deliver on South Africa's growing transport needs in an expanding economy.

After the announcement that South African Airways, Metrorail and Shosholoza Meyl would be removed from the Transnet stable, it understandably led to concerns among affected employees about their conditions of employment and benefits after the disposal process. Although conditions of employment in the case of sale or transfer of a business are covered by the Labour Relations Act, the labour unions, Transnet Management and the Minister of Public Enterprises agreed after negotiations that a special amendment of the principal Act was necessary to ensure that the disposal process had as little effect on the retirement savings of employees as possible without compromising the overall Transnet restructuring process.

The Bill therefore provides that transferring employees and pensioners can retain membership in existing Transnet pension and retirement funds.

Very importantly, the Bill retains the status of the Transnet pension funds as Paragraph A Funds in terms of the 1956 Pension Funds Act meaning that when a member leaves employment he or she is entitled to have his or her lump sum benefits taxed on the basis that that portion attributable to membership prior to 1 March 1998 will not be subject to tax. We welcome this protection given to the retirement savings of qualifying members.

Two other provisions deserve mention. First, the Bill provides that pensions may in future be attached not just in terms of the Divorce Act, but also the Maintenance Act, 1998. The IFP supports this as it is yet another victory for women and children.

Second, the Bill will come into effect retrospectively on 11 November 2005 - the date of Transnet's restructuring. The IFP has been assured that all stakeholders had agreed to this unusual step and we therefore support it.


Madame Speaker,

The IFP is satisfied that the Bill is the result of inclusive negotiations between the relevant stakeholders and that it is in the best interests of Transnet employees and pensioners. We will therefore support the Bill.

Thank you.