Since we began transforming Transnet into a world-class freight transport and logistics business in 2003, the plight of our pensioners has been an issue that has bothered us.
At last, though, we are heartened at being able to do something about this.
We will be paying R125million in a historic gratuitous bonus to members of the Transnet Second Defined Benefit Fund (TSDBF). This will also benefit the widows of black South Africans - those spouses of black pensioners who retired between December 16 1974 to April 1 1986, and who subsequently died before November 1 2000 and whose spouses are not entitled to a spouse's pension from the Transnet funds.
The TSDBF's financial position has not always been good. It endured a deficit of about R5billion last year, which made it harder to consider bonus payments to vulnerable members.
As a defined benefit fund, it is important to note that the deficit position did not affect the benefits or the scale paid to members.
Members always received what was due to them in terms of the rules, and Transnet, as the employer, guaranteed these benefits.
But the 2percent a year pension increase guaranteed by the rules of the TSDBF is also the only increase that these pensioners have received since 2003.
This 2percent is the maximum they can receive in terms of the rules - regardless of whether the fund can afford more than this. Though a guaranteed pension increase of this nature is an unusual benefit enjoyed by the pensioners of this fund, as a stand-alone increase it has not been sufficient for these pensioners.
Thankfully, the TSDBF is now in a financially strong position - in fact, it now has a surplus because of the leadership role played by Transnet.
The strength of the TSDBF is the result of the leadership role played by Transnet and two years' worth of work in restructuring and implementing an appropriate strategy suitable for a pensioner-only fund.
This strong financial position, also made possible by two important transactions - the sale of MTN shares and the V&A investments led by Transnet - facilitated discussions between Transnet and the trustees of the TSDBF as we worked together to agree to amendments to the rules of the fund.
Considerable progress has been made to this effect and amendments to the rules were agreed to this year and were submitted to the relevant regulatory authorities.
Once these rule amendments are approved, then the trustees will have the power to consider bonus payments from the fund for the pensioners in order to supplement their current pension benefits, subject, principally, to fund affordability.
It is hoped that these amendments will be approved in the near future.
But in the meantime we have set aside R125million of Transnet's money to pay an unprecedented gratuitous bonus to those pensioners and beneficiaries who are finding it difficult to meet their daily living expenses as a result of the effects of inflation, medical costs and fuel increases, among others.
In determining the basis of this bonus, we have prioritised the plight of those pensioners with long service who are unlikely to have significant alternative retirement funding income, those of pensioners older than 65, who are unlikely to be able to earn supplementary income and, for obvious reasons, those pensioners who receive very low pensions.
In addition to the above, we have also decided that all pensioners of the will get a bonus of 1percent of their yearly income.
This once-off gratuitous bonus is in addition to the benefits paid by the TSDBF, including the 2percent a year guaranteed increase.
The TSDBF is a large fund, consisting of about 45000 pensioners and 42000 beneficiaries. For historical and other reasons, a large portion of the pensioners of this fund receive less than the state pension of R870 a month. Some, especially the widows of black employees, receive as little as R234 a month. Relative to their current income, we therefore expect this bonus to help these individuals materially with any debt they have to bear.
For example, a pensioner or a dependent earning R234 a month will, in terms of our modest initiative, get a lump sum of R9312.
This humble gesture has been made possible by the focus we have put into restructuring and strengthening the finances of Transnet in the past two years.
Additional bonuses of this nature, targeting especially the poor, shall be reviewed by our board from time to time.
lThe writer is the group chief executive of Transnet