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Today, I submitted a formal request to the Public Protector to investigate the management failures in two Transnet pension funds.

Despite having contributed to their pension funds for years, these pensioners face an uncertain financial future.

More than 70 000 pensioners belonging to the Transnet Pension Fund (TPF) and the Transnet Second Defined Benefit Pension Fund (TSDBPF) are facing destitution as the paltry increases in their benefits of 2% per annum fail to keep up with the rising cost of living. Inflation is currently 5.7%.

As a result of the poor management of these funds, Transnet pensioners who retired in 1990 on R1 400 per month currently receive only R3 000 per month. Pensioners at other state-owned enterprises, such as Eskom, who retired with a similar pension in 1990 now receive approximately R8 000 per month.

Despite a 2010 instruction by parliament to Transnet and the National Treasury to invest R1.9bn into the ailing pension funds, Treasury has not yet recapitalised the fund citing the fact that the payment was not budgeted for and is simply unaffordable.

Transnet boasted an increase in profit due to rocketing freight volumes and operational efficiencies despite escalating operating costs at the end of the financial year in March. Earnings before interest, depreciation, taxation and amortisation (EBIT), the company's main measure of profitability, shot up 19.8% to R18.9bn. If Treasury is not able to inject funds into the Transnet funds, it may be time for Telkom to identify ways to restore the fund themselves.

When Transnet appeared before our portfolio committee earlier this year, I posed the direct question: “In all of your spending plan, which amounts to R300 billion over 7 years, I see nothing budgeted for the Transnet pensioners?” The answer was an uncaring and unsympathetic: “You are quite right, we have not budgeted for any further cash injections.”

Transnet is a state owned entity. If this entity is not performing its obligations to pensioners, the Office of the Public Protector should investigate and make recommendations as to how the problems in the management and financing of Transnet pensions can be rectified.

I will continue fighting to ensure that Transnet pensioners receive increases that will enable them to maintain an acceptable standard of living in their old age.