Transnet has come up with a plan to put more money into the hands of its pensioners, costing it R500million and an additional R35million a year.
Chris Wells, acting as chief executive since the departure of Maria Ramos, announced that Transnet has restructured post retirement medical benefits for 26000 people insured by Transmed.
Transnet pension funds have been problematic for the company for years. In 1990, Transnet had a R17billion deficit on its defined pension fund and has had to work that down to its current surplus.
Transnet currently incurs a R200million a year cost (paid directly to Transmed), in addition to R1.2billion set aside as an actuarial liability relating to the 26000 pensioners and dependants.
But Wells said that under the current arrangement, Transmed was not sustainable.
The new plan will see it give cash to members directly, and will encourage them to keep the money in a medical scheme.
This will add around R35million a year to its contribution to these people's medical costs, and the company will charge an additional R500million to its income statement to account for the addition to its actuarial liability.
Commenting on Transnet's current operating position, Wells said that medium term volume projections have changed significantly. But key projects in its R80-billion capital expenditure programme are on course.