Madam Chairperson, I must say that after what was, I believe, quite a momentous debate and vote, we are dealing with matters which may seem more mundane, but which I think also relate to some important rights that pensioners have. I would like once again to table before this House the second reading debate for the Transnet Pension Fund Amendment Bill, because this ends a long process and it is my hope that the House will support the Bill.
Members will recall that the basic changes being made to the Transnet Pension Fund Bill are the outcome of the protected negotiation and strike action earlier this year. In the first reading debate, the portfolio committee and I gave quite a bit of detail on the actual contents of the Bill, so I will not repeat that now. I will just take some time to remind us all of the origins of this piece of legislation.
The problem arose when we began to implement the restructuring of Transnet by moving certain entities off its balance sheet into separate entities. The particular issue arose when the process of transferring Metrorail to the Department of Transport commenced. The unions raised the point that it seemed unfair that when their members who'd been moved from one part of the public sector to another should be prejudiced in any way. Such prejudice particularly arose out of historically specific provisions in the pension dispensation in Transnet. This is quite a complex issue but it was agreed as part of the resolution of the strike that the matter would receive attention.
After very constructive negotiations the amendment Bill embodies the final solution to this problem. This essentially allows existing employees to move out of Transnet to another SOE or public entity, but to remain within the new Transport Pension Fund. Whilst this does create a new degree of complexity, and does not make for the most elegant arrangement between employees and the employer company, I believe it is a workable and fair solution to the problem.
It was, and I believe is, the view of some unions that the new fund should be opened for new employees entering those new SOEs or public entities. However, we were not prepared to accommodate this as it makes for a complex situation and creates unnecessary complexities and operational problems for both the enterprises and the future pensioners. I am quite clear in my mind that the implementation of this suggestion would not be in the best interest of either the SOE or the pensioners.
The hon member Peter Hendrickse, who chaired the sessions on the Bill of the portfolio committee, will provide more detail to the House on the excellent work that they have done on improving the Bill since the first reading debate. Let me just highlight one or two points: Firstly, the definition of "alternate employer" makes it quite clear that this applies to a specific situation relevant to Transnet and its employees, who moved to a location where the state is either a shareholder or the controlling structure as defined in the PFMA.
We are dealing with particular circumstances related to the current restructuring of Transnet. I stress this point as it is in no-one's interest to have overly complex pension funds. An insight into what I mean by complexity as found in the fairly detailed structure of the fund and subfunds that is dealt with in clause 4. This complexity is necessary in order to protect the interests of the enterprises and the employees. We can accommodate this complexity to meet the legitimate needs of employees in a very specific current and historical situation we find ourselves in now, but clearly this is not best practice model for the future.
I believe that we have protected the rights of existing employees through the amendment Bill. There have been no significant changes in regard to the second defined benefit fund. One positive note I have in regard to this second defined benefit fund is its improved financial position. As indicated by the CEO of Transnet, this will allow us to address certain real problems in that fund.
Let me conclude by once again thanking the portfolio committee for the hard work they have done and, in particular, the hon Peter Hendrickse for chairing the process. We were dealing with the pressure of time and an antiquated form of drafting. It is often much more difficult to start from something that is from another era when amending an Act than it is to start with a clean slate.
I know that the subcommittee put in many hours of work. It was a hard task for this time of the year and I would like to thank them for that. I would like to thank the CEO of Transnet and her team for their commitment to ensuring that the settlement condition of the strike was indeed implemented, and my thanks to the unions for their steadfast commitment to the interests of their members. It is my sincere hope that the House will support this amending Bill. Thank you.
Madam Chair, as the Minister has just stated and as we said during the Bill's first reading, the Bill deals with the consequences of Transnet's restructuring, with particular reference to Metrorail and SAA - South African Airways. It was also meant to protect the pension benefits accumulated by Transnet employees, with regard to the tax-free amounts that they accumulated before March 1990.
An agreement was reached after a protracted strike earlier this year and we wanted to ensure that in the processing of this Bill we did not inadvertently detract from it. To this extent, we kept the unions and Transnet abreast of all developments, changes and the committee's progress. We spent a lot of time tying to improve the writing and style of the Bill to make it much more user-friendly and easier to read. The Minister himself referred to the antiquated wording in the original Act.
Some of the substantive changes included the following: to formalise the initial transfer from the Transport Pension Fund to the Transnet subfund; to remove the veto powers of the Transnet Pension Fund valuator in determining the value of assets to be reassigned from one subfund to another; to provide for the general powers of the board of trustees as opposed to the subfund board powers; to provide that special rules rather than the general rules deal with the outsourcing of liabilities - special rules are those rules that are applicable to subfund boards; to remove the unfettered discretion of the board of trustees; to determine the allocation of benefits, costs and losses or liabilities between subfunds of the Transnet Pension Fund, and this means that any aggrieved party will be able to go to court to challenge the decision of the board; to remove the obligation on the board in terms section 9 to stop the payment of the pension to an insolvent pensioner, and instead to give the board the discretion to decide whether to do so or not; to provide for the transfer of special pensioner categories - these are people who are already receiving a pension from Transnet, for example the black widows pension fund; and to transfer this liability from Transnet to this Transnet Second Defined Benefit Fund, with the approval of the trustees, Transnet and the Minister.
During our committee public hearings some issues were raised and I'd like to refer to them. As I said, although the key provision of the Bill was meant to be an outcome of the negotiated settlement between Transnet management and the trade unions, it did emerge at the public hearings on the Bill that at least one of the Transnet unions, Utatu - United Transport and Allied Trade Union - and the SA Airways union, that is the Aviation Union of Southern Africa, felt that people who became employed by an alternative employer should, as defined in the Bill and after its implementation, be allowed to join the Transnet Retirement Fund, and that if they were to be excluded, that this exclusion should be set out in the rules of the fund and not in the Act.
Transnet management were opposed to these proposals. The Transnet management and the unions presented their respective arguments regarding these issues in written form to the committee. Consistent with the committee's views that we cannot serve as an industrial relations forum or a bargaining chamber, we felt that it was not appropriate for us to decide on whether the new employees should belong to the Transnet Retirement Fund.
Following further negotiations between Transnet management and the trade unions on the recommendations of the committee, we were informed that the SA Transport and Allied Workers Union, Satawu, and the SA Railways and Harbours Workers Union, Sarhru - who represent the majority of workers, agreed that new employees should not be included in the Transnet Retirement Fund, and that this exclusion should be set out in the Act and not just in the rules of the fund.
Utatu and AUSA still held to their views but decided that they would not pursue the matter further with us. They wanted us to record their views in our report to Parliament, and this is what we are doing here today.
The committee processed the Bill accordingly. However, some members of the committee felt that it was not necessary that the exclusion of new employees be set out in the Bill. We thus suggested that whether the provision to exclude new employees from the Transnet retirement fund was in the Bill or not would ultimately not affect decisions by the unions to take industrial actions on the matter. So, not too much should be made of the practical effects of the differences between management and some of the unions on this matter.
Several members of the public who responded to our request for comments on the Bill raised concerns about the Transnet Second Defined Benefit Pension Fund. These concerns cannot be addressed with the processing of this particular Bill. They essentially revolve around some of the following issues: that since 2003 members of the Transnet Second Defined Benefit Pension Fund have been receiving increases of 2% per annum; and that there are pensioners who receive less than the amount granted to those receiving state old-age pensions, and also that there are potential pensioners or dependent pensioners who, for a variety of reasons, including the system of migrant labour and wide-scale illiteracy in the past, may not have been aware that they are entitled to certain benefits. Transnet has offered to assist these people if they should be approached. Obviously, the committee empathises with the above concerns.
In a briefing on Transnet's annual report to the portfolio committee on 10 October, the chief executive officer, Ms Maria Ramos, said that Transnet was also concerned about the issues raised above and had presented a proposal to the trustees of the fund in this regard. With the money that will come into the Transnet Second Defined Benefit Pension Fund - what a long name - and with the recent sale of the V&A Waterfront, the prospect of resolving these matters are much greater.
The committee also raised the matter during the First Reading debate on the Bill and welcomes the Minister's favourable response as he again responded today. Secondly, I would like to comment on the circumstances in which we had to process the Bill. The committee has given notice that it will not again fast-track a Bill of this nature, particularly in the difficult end of the year period. We had very limited time to finalise this Bill.
The committee would also like to express its unanimous frustration at the fact that we do not have the necessary resources to assist us to do our work efficiently and effectively. I believe that it is a severe indictment on all of us - the presiding officers, the Whippery, the chairpersons of committees, the management of Parliament and ourselves that, 12 years into our democracy and with everyone proclaiming that committees are the backbone of Parliament, we do not have the necessary skilled and technically competent people dedicated to each committee - people who are there to assist us when we review annual reports or budgets or deal with legislation such as this.
It is nonsense that committee chairpersons must spend hours writing reports - be it on study tour reports, oversight visits, public hearings or annual reports. It is also ridiculous that members are required to ensure that each comma, "may or shall" is correctly used to reflect the committees' wishes.
Allow me, in passing, just with envy, to report to you that when we visited the Brazilian parliament last year, we found that they had 200 - and I want to repeat - they had at least 200 lawyers to assist members with, amongst others, research, report and speech writing. And I think we can take a tip from them. In conclusion, may I express my appreciation to all those who participated in the processing of this Bill; the unions and Transnet; and all those who took time to write to us, particularly regarding the Transnet Second Defined Benefit Fund. You have our support and our well wishes.
A particular word of thanks goes to Carla Prentice from Transnet, to Ursula Fikelepe and Denzel Matjila at DPE, to Fazile and Ouma and Gideon Winn - the state law advisers, Martin Stephens from the DA for his contribution to the work of the subcommittee... [Interjections.] ... I thought we'd get your support. I also want to thank our ANC researcher, Desmari Carolus. These people were prepared to meet at short notice, to work long hours and oftentimes had to work late at night at home.
Last but not least, allow me to thank my colleagues and comrades in the committee and our chairperson, Yunus Carrim - I hope you're paying attention. Yunus Carrim is a perfectionist, a terribly hard task master but one who at least leads by example.
The committee unanimously recommends that the House passes this Bill. With the few seconds remaining to me, may I, on behalf of this House, congratulate my wife on her birthday today. [Laughter.] [Applause.]
The HOUSE CHAIRPERSON (Ms C-S Botha): Congratulations to your wife, hon member!
Thank you, Madam Chair. May I also associate myself with those congratulations. During the first reading debate I stated that we regard this Bill as an important piece of legislation since it aims to protect the vested rights of Transnet employees and pensioners in the Transnet restructuring process.
Its aims are laudable, although the Bill in its original form, as we have heard, had not been meticulously drafted and the committee had to spend a great deal of time redrafting it. This was done primarily by the subcommittee already mentioned, consisting of myself and the hon Hendrickse as acting chair, with valuable inputs coming from the committee chair, hon Carrim, and very ably assisted by the already mentioned personnel from the pension fund, the Department of Public Enterprises, Transnet and the state law advisers. We owe them all a great deal of thanks.
In the same breath, however, it must be said that drafting legislation is not the function of parliamentarians. We should not find ourselves in the position of having virtually to reconceive the structure of a Bill and then to redraft it on the trot.
Apart from the many amendments in order to get rid of as much legalese as possible, the committee rejected the original clause 5 of the Bill and then had to redraft a whole new clause to insert into the Act as section 4A.
Section 4A contains the core provisions of the Bill. The other provisions essentially follow on from these, thus when the new section 4A was drafted a number of consequential changes in other clauses became necessary. The speed at which this had to be done is not acceptable. It increases the likelihood of unintended consequences in practice and at the minimum might saddle the Statute Book with a badly worded and ill-structured piece of legislation.
Under the circumstances and given the time constraints, we did our best to produce a workmanlike document that embodies the spirit and the intent of the agreement that was reached between Transnet and the labour unions. We trust that there will be no unintended consequences, but if there are we invite all parties concerned to approach the committee so that suitable amendments can be proposed. We sincerely believe, however, that this will not be necessary.
I have been approached by many Transnet pensioners seeking reassurance that their pensions will not be detrimentally affected. This insurance can indeed be given, but the weakness is that there are no changes that will materially benefit their plight. As a committee we had inputs from the pensioners, and we can assure all of them that we are very much aware of their problems.
We are currently urging the department and Transnet to bring these pensions, which have lagged behind inflation for years, up to a proper civilised standard. We are informed that some pensioners receive less than a civil pension, as has been mentioned. That is no way to reward those who served Transnet faithfully over many years. Transnet assures us that the sale of the V & A Waterfront might ameliorate that situation.
I have also tried to inform the Minister of Finance, the hon Trevor Manuel, that his department is indeed the guarantor of the Transnet Pension Fund, contrary to his denial of a few days ago in this House. I hope he got the message. When he becomes alive to that fact we trust that he, too, will start taking a keener interest in the whole matter of Transnet pensions.
Everything considered, we are satisfied with the Bill as it now stands and the DA supports its second reading. I thank you.
Madam Deputy Speaker, hon members, the Transnet Pension Fund Amendment Bill is a direct result of the restructuring processes at Transnet, and in particular the strategic disposal of noncore assets.
The hon Minister spoke at length about the context of this Bill. Understandably, the disposal processes caused a great deal of concern and anxiety amongst the affected employees about their retirement benefits. As a result the labour unions, Transnet management, and the Minister for Public Enterprises agreed, after negotiations, that a special amendment of the Transnet Pension Fund Act was necessary to ensure that the disposal process had little effect on the retirement savings of employees.
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 Fund as "paragraph (a)" funds in terms of the 1956 Pension Funds Act. This means 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. The IFP welcomes this protection given to the retirement savings of qualifying members.
The Bill provides that members' pensions may in future be attached not just in terms of the Divorce Act but also the Maintenance Act. The IFP supports this as this is yet another victory for women and children.
The IFP is satisfied that the Bill is a result of extensive negotiations between the relevant stakeholders and that it is in their common and best interest. After much re-engineering of the Bill and the elimination of legalistic jargon, the IFP will therefore support the Bill. I thank you.
Deputy Speaker, the ACDP is satisfied with the provisions of this Bill, particularly as far as they relate to the protection of the interests of affected employees. The Transnet Pension Fund Amendment Bill is fully compliant with current labour legislation.
The proposed creation of a multi-employee fund for state-owned enterprises will further facilitate the establishment of a dedicated pension fund for Transnet employees. This means that the implementation of innovative human resource strategies can take place in an efficient, cost-effective and independent manner.
The selling off of noncore assets generally results in improved operational efficiency, and also financial gain. In the case of Transnet in particular these positive spin-offs hold significant implications for the country. Proceeds from the disposal of noncore assets will boost Transnet's R64,5 billion capital investment programme over the next five years. The economic growth for the country through strengthening of infrastructure is therefore guaranteed.
The Transnet Pension Fund Amendment Bill reassures South Africans that care will be taken to ensure that employees are not disadvantaged by initiatives aimed at shifting focus to one operation. We support the Bill. Thank you.
Thank you, Madam Deputy Speaker. In view of the current disposal process of Transnet's noncore assets to government and the private sector, the MF finds this Bill crucial in protecting the interests and rights of employees and pensioners who are being transferred due to this process, as well as to allow them to exercise the option to retain their current membership of the fund.
The Bill correctly makes available provisions for subfunds that shall cater for the transfer of liabilities to the new employer. This will secure Transnet's commitment to guarantee the benefit of its funds to its members.
We are, however, interested in the impact this will have on new employees of Transnet as well as the state-owned enterprise employers that have taken over Transnet's noncore business, and the efficacy of the process.
We also express our concerns about the new section 10(b) in respect of which clarity is needed in the event of death. However, we believe that the multi-employer pension fund housed by the Transnet Pension Fund is certainly a good means to extend the risks carried by Transnet and to protect the interests of older members of the fund.
The MF supports the Transnet Pension Fund Amendment Bill. Thank you, Madam Chair.
Comrade Deputy Speaker, comrades, friends, I want to say something that I think is unprecedented in the history of this House. I hope it will be recorded. I have been allocated five minutes, and I am going to use only a minute. So can we start by applauding me? [Interjections.] If you do not applaud, I am going to speak for the full five minutes. [Applause.]
I want to say, firstly, thank you to everybody who participated in processing this Bill, which is a fast-tracked Bill. In particular of course I want to thank Peter Hendrickse, especially as he praised me so much. Those are the words, by the way, that I wrote, of his speech. He wrote a longer speech for me to present today on how good he has been, but unfortunately I left the speech upstairs in my room, Peter! All I can say is that Peter Hendrickse ...
Hon member Hendrickse!
Yes, hon member Hendrickse. Sorry, that was most ungracious of me. He has been really outstanding, Madam Speaker, and I really think there is no need for me ...
Madam Deputy Speaker, I think the hon member's minute is up.
Not as yet.
Not as yet, thank you. But let me just say, finally, that there were other issues, Minister, that arose from this Bill, dealing with the broader pension fund industry. And members, not least the hon - let me stress, honourable - Peter Hendrickse, raised these issues, because they know more about the pension industry.
Hon Carrim, we have given you back your five minutes.
Oh, OK. Well, I just want to say one final thing, that we have drawn the attention of the Chairperson of the Portfolio Committee on Finance, Nhlanhla Nene, who is here, to the broader pension fund industry issues which arose while we processed this Bill. We are pleading that the pension fund industry be reviewed before the year 2020 by your Minister of Finance and be brought to this House, that the matter be accelerated, and that all the members who raised issues bring it to your door so that you can put pressure on the Minister of Finance to finalise that process. Thank you, all. [Applause.]
Thank you very much, Deputy Speaker, and to all those members who have spoken. Once again, I really do commend and sympathise with the committee for having to work under difficult circumstances, but I think from my side as a Minister I have seen a committee with a lot of capacity to make sensible changes. I think that is valuable. It may not be entirely what you expected to do, but I do think that it is actually a very useful exercise.
This is the first of a number of pieces of legislation that will emanate from the restructuring process. I am afraid we are putting some pressure on you again to table the SAA Bill, but it does not have to be passed by the end of this year. Originally, with some of these new Bills, we had thought we may not need them, but I think it is a wiser decision to incorporate many of these changes in legislation. When we started the relationship between the Ministry and the committee I do not think we envisaged a great deal of legislation, but we will in fact end up with a few pieces of legislation. So I am very pleased that you were able to practise and hone your skills on this particular fairly simple Bill, because there are some others coming up next year.
We are conscious of the issues in the second defined benefit fund. I think some steps will be taken that will be beneficial in the near future, but it really reinforces my viewpoint that our objective for our employees in the state-owned enterprises is to have stable, simpler pension funds. The complexities that we have inherited from the past are not a good thing and, generally speaking, our objective over time must be to simplify these Bills, make them stable, make them financially sound, in the best interests of people who have worked all their lives and really do deserve a good pension. But thank you for the support, and I hope the House approves the Bill. [Applause.]
Debate concluded.
Bill read a second time.