I wish to remind members that in terms of the guidelines adopted by this House on 12 September 2006, the member in charge of a Bill will be allocated 15 minutes to make an introductory speech and to reply to the debate, while other members may speak for no longer than three minutes each. There is no speakers' list for First Reading debates. After the introductory speech, members who wish to participate in the debate must press the "To Talk" Button from their allocated seats and, when recognised by the presiding officer, may speak from the floor microphones.
I now call upon the Minister of Public Enterprises to make an introductory speech on the Bill.
Chairperson, it's a pleasure to be breaking new ground on two fronts: this is my first Bill as Minister of Public Enterprises and in this exciting new format.
Let me give you some background quickly. Prior to 1990, Transnet had the Railways and Harbours Pension Fund for black employees, and the Railways and Harbours Superannuation Fund for white employees.
In 1990, these two funds were merged into the Transnet Pension Fund which was established under the Transnet Pension Fund Act of 1990. All Transnet employees were then obliged to become members of the Transnet Pension Fund.
The Transnet Pension Fund is a defined benefit fund which means that Transnet guarantees upfront the amount of the pension benefit that an employee will receive on retirement.
In 2002, new funds were established and the Act was amended to accommodate these new funds. The new funds were the Transnet Second Defined Benefit Fund, a fund for Transnet pensioners, and also a Defined Benefit Fund. No new pensioners were allowed to join this fund after 2000. Only those pensioners who were existing members at the time of the fund's establishment were allowed to remain members. Thus this fund is also known as a closed fund, precisely because it is closed to new members.
The second new fund, the Transnet Retirement Fund, was an innovation in the sense that it was a defined contribution fund that was opened to all new Transnet employees to join at that time. A defined contribution Fund means that the amount of the pension benefit that the employee receives on retirement will depend on the contributions made by the employee, the employer and the income of investments made from these contributions.
Upon the establishment of these two new funds in 2000, we now had three funds, the Transnet Pension Fund and the two new ones. Most employees voluntarily transferred from the Transnet Pension Fund to the Transnet Retirement Fund. Presently, the Transnet Pension Fund has approximately 10 000 members, and its members consist of all pensioners who did not transfer to the Transnet Retirement Fund.
No new members have been allowed to join the Transnet Pension Fund since 2000. Members may also be aware that Transnet is in the process of restructuring from a transport conglomerate to a more focused freight company. Its core business is ports, rail freight and pipelines.
As part of this restructuring, we have been disposing of certain businesses that are not core to the freight business. Such disposals include, for example, the transfer of Transnet shares and SAA to government, and the transfer of Metrorail to the SA Rail Commuter Corporation, the SARCC.
It will be appreciated that as part of the transfer of businesses specifically, employees working in the transferring businesses would be transferred along with the business. Essentially, the transferred workers would no longer be employed by Transnet, but in various cases, by the SARCC as in the case of Metrorail.
As the new employer, the SARCC would provide the new workers with new employment conditions and benefits including membership of new pension funds. Thus the membership in the Transnet Funds will terminate along with the transfer. However, the peculiarity of the Transnet Fund is that all three were established by statute. In terms of the Income Tax Act, certain pension funds are established by statute and these are known as paragraph A funds. They have some benefits that allow the lump sum benefits of those members not to be taxed when the member leaves employment.
This protection however applies only to benefits attributable to membership prior to 1 March 1998. Thus the portion of a member's benefit relating to the employment before that date may not be taxable.
Thus, if a new employers pension fund is not a paragraph A fund as defined in the Income Tax Act, then the employees tax benefit for membership obtained prior to March 1998 vests when they leave the employment.
The Income Tax Act contains a formula for calculating such lump sum benefits and the vesting of such benefits. Now the effect of Transnet restructuring therefore meant that the employees transferring to entities such as the SARCC, which does not have a pension fund established by statute and may not be defined as a paragraph A fund, could lose the income tax protection afforded to them under the Transnet funds.
Therefore, in April 2006, Transnet, the trade unions and I agreed that the pension benefits of existing members of the Transnet funds would remain the same notwithstanding the disposal of certain Transnet businesses. Under the agreement, employees transferring to state-owned enterprises buying Transnet businesses and shares would continue to be members of the Transnet Retirement Fund.
The Transnet Pension Fund will be restructured into a multiemployer fund to allow continued membership of those defined employees. Thus the membership of those employees transferring to other employers such as the SARCC would retain their membership of the Transnet funds in order to receive continued income tax protection of their pension benefits.
The reason for introducing this Bill before Parliament is to effect the agreement reached between Transnet, the trade unions and myself. The draft amendments of the Bill have been approved by Transnet, the trustees of the three Transnet funds and Cabinet, and are published in the Government Gazette, 29303 of 12 October 2006.
The agreement essentially says the following:
That the Transnet Pension Fund remains a closed defined benefit fund, and is restructured into a multiemployer fund. The Transnet Retirement Fund remains a defined contribution fund and allows existing members to retain their fund membership even after the transfer of the business to a new SOE employer. I should stress that this is if it is to another state enterprise, not if the transfer is into the private sector.
The Transnet Second Defined Benefit Fund remains a closed defined benefit fund and is largely unchanged. There are some technical amendments. The Transnet Pension Fund is renamed the Transport Pension Fund, and although it is an independent multiemployer fund, it remains one legal entity.
The SOE of whom Transnet businesses have disposed may join as principal employers, and that's essentially the SARCC, SAA and, under the structure, there is one subfund per principal, and some funds automatically consist of active members.
The allocation of pensioners and dependants of pensioners as fund members is determined in the sale agreements relating to the Transnet businesses. The relevant liabilities, assets, rights and obligations allocated to the subfund are determined by the trustees and the fund evaluators and actuaries. Subfunds have clearly defined ring-fenced liabilities and assets and each principal employer alone guarantees his own subfund.
This new Transport Pension Fund will have two sets of rules - the general rules and the specific rules for the subfunds. There will also be two levels of trustees, one for the Transport Pension Fund and sub-boards for the subfunds. The retirement fund will not be a multiemployer fund. This had been a bit of an issue but we feel that it will be essential to maintain clarity and raise no false expectations so the fund remains a Transnet fund.
The Bill proposes provisions that will allow existing members who are employees of businesses sold to certain SOE and entities transferred to government to remain members even after transfer. No new employees of these SOEs or other entities may join the Transnet Retirement Fund.
The result the Bill seeks to achieve is to maintain the benefits and tax treatment available to existing fund members and, on disposal, to allow the new employer to guarantee the defined exposure of employees opting to remain in the Transnet Pension Fund.
The amendments in the Bill seek to limit the impact of Transnet's restructuring of worker benefits and legitimise the continued membership of the Transnet Pension Fund and the Transnet Retirement Fund via SOE employees.
I would like to thank the portfolio committee for the hard work it has done under the chairpersonship of Peter Hendrickse, for this and for the inputs made by the trade union movement. I sincerely hope we will receive support for this Bill as it goes forward. Thank you. [Applause.]
Chairperson, it's obvious from the enthusiasm with which members have been following the explanation of the Minister that he has given us a very clear picture of this amendment.
All that remains for me is to emphasise that this product is an agreement between the unions, management and government. Its primary purpose is to protect the benefits of workers particularly that of the tax-free amounts accrued before 1990.
Having said that, this doesn't make Parliament a rubber stamp for the agreement, and we are applying our minds and examining each part of this agreement.
The committee has held a public hearing at which the following unions were present: the SA Transport and Allied Workers Union, the United Transport and Allied Trade Union, Aviation Union of South Africa, SA Pilots Association and the SA Railways and Harbours Union.
The Transnet Pension Fund as well as the Transnet management also participated in these hearings. All of these unions supported the legislation although some had reservations about the prohibition of new employees who were not working for Transnet to join the Transnet Retirement Fund, and that this prohibition has been placed in an Act rather than in the Rules. The committee has been engaging the stakeholders regarding this issue.
Another issue of concern to the committee was also whether, when an employee commits fraud, that money should be retrieved from that employee's pension fund. We are not convinced that this is a correct measure or way of going about it.
Over and above this, we have also received a number of written submissions from individual pensioners as well as from organisations with regard to the Second Defined Transnet Pension Benefit Fund. Now, although this Bill does not deal with that particular fund, the committee has decided that we are going to respond to the issues raised in those submissions.
We heard from the SA Organisation of Retired Persons, the Silver Springbok Association, Club 60 and the Venda Party. The Act at the moment provides that these pensioners can receive an annual increase of 2%. They have been pleading poverty. As you know, inflation has been above 2% for the last few years. It has also been shown that some of these pensioners are receiving a pension of below SOP, that is, the State Old-Age Pension. There are approximately 80 000 pensioners altogether in the Transnet Second Defined Pension Fund.
In conclusion, I would also like to make use of this opportunity to congratulate the Pension Funds Adjudicator, Mr Vuyani Ngalwana, for his activist approach to his task. He has been like a breath of fresh air in a very staid and conservative environment. His decisions always seem to come down on the side of the underdog when they take on the all-powerful and mammoth life assurance industry.
I hope that newspaper reports that he is considering stepping down at the end of his contract are not true. [Time expired.] [Applause.]
Chairperson, this Bill is an important one because it affects the lives of thousands of Transnet workers and pensioners, whose membership of the Transnet Pension Fund is their sole lifeline in their old age and in times of disability. It is thus no wonder that when the selling off of noncore assets out of Transnet was announced, employees were extremely concerned about their vested pension fund rights and hence an extended strike until those concerns were addressed in an agreement with management. The Bill then results from and gives effect to that agreement.
However, it is not only current employees of Transnet and its subsidiaries that are concerned about their vested pension fund rights. The thousands of existing pensioners are equally concerned and thus the evidence before the committee. Perhaps they are even more concerned because they already rely on their vested rights in the fund for their survival. Thus it is not surprising that they find any structural change threatening. Consequently, it is only right that in this debate we dispel also the misgivings and fears of existing pensioners regarding the possible effect of the fund's restructuring.
Upon analysis of the Bill, pensioners can rest assured that their rights, benefits and risks are not affected either for bad or, regrettably, for better. Indeed, the guiding principle of the Bill is to allow the selling off of Transnet's noncore assets without affecting members' vested rights or future benefits.
We fully realise that this does not address the present issue many pensioners have regarding the paucity of their annual pension increases, but that is not the subject matter of, nor is it influenced by, this Bill. Those issues will be dealt with separately and substantively in this House in the near future. Although there are some wording changes to be discussed and probably made and some details to be clarified, the outcome will not be materially altered. On those premises, the DA supports the first reading of the Bill. I thank you.
Chairperson, this Transnet Pension Fund Amendment Bill is obviously part of the broader restructuring of Transnet. I am pleased to say that the word "restructuring" is no longer, if it ever was, a fig-leaf word to cover up the p-word: privatisation. We are talking here about restructuring Transnet essentially to develop well-focused state-owned enterprises and public utilities and, in particular, to separate out the key freight logistics function from the airline - the national carrier: SA Airways - and the commuter-rail functions.
In parenthesis, Minister Erwin, while we have you here on this topic, I think we must be careful in this restructuring that we don't allow the critical areas in which there is an interface between commuting or passenger-rail services and freight logistics to slip between the cracks. I am thinking in particular of rural branch lines or Southern African trade routes, which often involve rail passengers and also people carrying goods. I think we must make sure that we don't allow that critical dimension to slip.
On the issue in front of us: the merger in December last year of the SA Rail Commuter Corporation and Metrorail put an end to what, I think, was an anomalous institutional arrangement. We had the Rail Commuter Corporation falling under the Department of Transport, acting essentially as a money conduit for the operating subsidy - some R2 billion to R3 billion a year - which went to Metrorail. Metrorail was then answerable not to the Department of Transport but to the Transnet board and, in turn, to the Department of Public Enterprises.
This institutional arrangement was a legacy, I think, of the late 1990s when we were getting ready to concession out chunks of the commuter-rail system. Unfortunately, in doing that we lost time. Fortunately for us others went ahead of us - in New Zealand, in Argentina and in the United Kingdom they went ahead with concessioning out passenger-rail services. That has been an unmitigated disaster in those countries; they are trying to reverse some of the problems. Luckily, we didn't go that far.
Obviously, a key complication with this merger, which went ahead in December, has been the vested pension rights of Metrorail employees as they've come over to the Rail Commuter Corporation. We would really like to welcome the innovative and consultative way in which this was done and the equitable, I think, proposals in front of us in terms of the amendment to the Transnet Pension Fund. As we proceed, we also need to bear in mind that Shosholoza Meyl employees, currently under Transnet, will be also coming across to the Rail Commuter Corporation in due course. We need to make sure that they are adequately consulted and that their concerns are provided for. Thank you, Chair.
Chairperson, Minister and hon members, the Transnet Pension Fund Amendment Bill is a direct result of the restructuring process at Transnet, in particular the strategic disposal of noncore assets to refocus Transnet into a rail transport and infrastructure company that can deliver in terms of South Africa's growing transport needs in an expanding economy.
After the announcement that SA Airways, Metrorail and the 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 for Public Enterprises agreed after negotiations that a special amendment to 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 of 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 agreed to this unusual step, and we therefore support it.
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.
Thank you, Madam Chair. This Bill represents the spirit through which our labour policies take into consideration the role that the trade unions, employers and the state play in shaping our legislation. It gives workers a key say in industry decision-making and ensuring that unions are fully involved in designing and overseeing changes in the workplace and at industry levels. Even when drafting the Reconstruction and Development Programme, this fact was clear already - that the agreement negotiated through collective bargaining should be extended through legislation to all workplaces in the industry.
In order to pursue our goal of eradicating poverty, our people should have savings and pensions to provide for their old age and retirement. This Bill represents another occasion where workers were instrumental in shaping their own future. Considering all these facts, this Bill will secure transferred employees' retirement savings and, as is the case with any form of restructuring, the human element should always come first, in order to make sure that all have a share in the country's wealth.
Looking at pension funds in general, during the apartheid regime, our people never had access to or enjoyed this opportunity. You look at white people and nonwhite people and notice that the pension dispensation was really not in favour of our people. When talking about this, it is really clear that the ANC-led government has done a lot in alleviating poverty by having this Bill. The ANC supports the Bill. Thank you.
Voorsitter, hierdie wet maak voorsiening vir die behoud van lidmaatskap van pensioenfondse, veral wanneer werknemers as gevolg van herstrukturerings oorgeplaas word. Dit handel, met wysigings, oor die Transnet-pensioenbedeling en is die gevolg van 'n proses van oorlegpleging tussen Transnet, sy pensioenfondse en die vakbonde. Maar ek wil nie praat namens die pensioenfondse of die vakbonde wat goed verteenwoordig was in die proses om die wysigingswet tot in sy huidige vorm te kry nie.
Ek wil praat namens een van die mees kwesbare belangegroepe in die Transnet- pensioensage en dit is die bejaardes wat lid is van die tweede vastevoordeelpensioenfonds. Hulle het geen bedingingsmag nie. Hulle kan nie staak nie, want hulle is nie veronderstel om te werk nie. Hulle behoort met waardigheid hul oudag te geniet en te rus van die dekadelange onbaatsugtige diens aan Suid-Afrika. Hierdie mense het meestal voor 1990 afgetree en is nou almal reeds diep in die sewentig of ouer. Meeste is verswak.
Gister het ek 'n oproep van 'n mev Esterhuizen ontvang. Sy het my meegedeel dat sy namens haar vader skakel. Hy het 'n beroerte gehad en kan nie meer sien nie, maar hy wil weet of ons kan help om sy karige Transnetpensioen te laat aanpas. Weens swak bestuur het hierdie pensioentrekkers nie gedeel in die ongekende groei van die markte die afgelope drie jaar nie. Hulle pensioen het nou reeds drie jaar na mekaar met slegs die statutre minimum van 2% verhoog. Baie van hulle kry 'n maandelikse pensioen wat laer is as die standaard staatspensioen vir bejaardes.
Hierdie Huis het 'n verantwoordelikheid teenoor die mees kwesbares in die gemeenskap. Sekere sake kan nie net aan die markte oorgelaat word om op te los nie. Ons word hier gekonfronteer met 'n konsepwet wat die resultaat is van onderhandelinge tussen amptenare en vakbonde. Die Parlement hoef nie maar net 'n rubberstempel te wees van 'n konsepwet wat swyg oor die lot van weerloses in die samelewing nie. Die VF Plus wil vra dat hierdie wysigingswet aangepas word, om ook voorsiening te maak vir 'n verhoging van die statutre minimumaanpassing van 2%. Die verkoop van die Kaapse Waterfront sal hopelik die finansile krisis van die vastevoordeelfonds verlig. Ons kan hier seker maak dat Transnet wel doen wat nodig is om ook die swaarkry van sy afgetredenes te verlig. Baie dankie. (Translation of Afrikaans speech follows.)
[Mr W D SPIES: Chairperson, this Act makes provision for the preservation of membership of pension funds, especially when employees are transferred as a result of restructuring. It deals, along with amendments, with the Transnet pension allocation and is the result of a consultation process between Transnet, its pension funds and the unions. But I do not want to speak on behalf of pension funds or the unions that were well represented in the process to get the draft Bill in its current form.
I want to speak on behalf of the most vulnerable interest group in the Transnet pension saga, and that is the elderly that are members of the second defined benefit pension fund. They do not have any bargaining powers. They cannot strike, because they are not supposed to work. They are supposed to enjoy their retirement with dignity and rest after decades of selfless service to South Africa. Most of them retired before 1990 and all of them are in their mid-seventies and older. Most are frail.
Yesterday I received a call from a Mrs Esterhuizen. She informed me that she was calling on behalf of her father. He had a stroke and cannot see any more, but he wants to know if we can't help to get his meagre Transnet pension adjusted. Due to poor management these pensioners did not share in the record growth of the markets over the past three years. Their pension only increased with the statutory minimum of 2%. Many of them receive a monthly pension that is lower than the standard government pension for the elderly.
This House has a responsibility towards the most vulnerable in the community. Certain cases cannot be left to the markets to resolve. We are confronted here with a draft Bill that is the result of negotiations between officials and unions. Parliament does not only have to be a rubber stamp for a draft Bill that is silent about the fate of the vulnerable in society. The FF Plus asks that this amendment Bill should be adjusted, to make provision for an increase of the statutory minimum adjustment of 2%. The selling of the Cape Waterfront will hopefully relieve the financial crisis of the defined benefit fund. We can ensure that Transnet does what it takes to relieve the suffering of its retired workers. Thank you very much.]
Thank you, Chairperson. This Bill is one of the very important milestones on the developmental agenda of the ANC-led government, that seeks to normalise society and bring about equality at all levels, including in the workplace. The Minister and other members have already outlined the salient features of this Bill. It is our belief that this Transnet Pension Fund is fully in compliance and in line with the Pension Funds Act in general. The trustees would also be given adequate training in order to discharge their fiduciary duties for the benefit of the members and the fund in general. The migration from the defined benefit schemes to the defined contribution schemes in the past resulted in surpluses that were in dispute until this House passed legislation that resolved the impasse. We trust that the lessons learnt from that process will be of value to this process and would be utilised to ensure that such anomalies don't arise. We look forward to having this Bill before this House in order to pass it before the end of the session. The ANC supports this Bill.
Thank you, Madam Chair. In light of the fact that many employees submit a portion of their salaries into a pension fund that will hopefully in their old age and retirement assist in maintaining their basic needs, it is incumbent upon us to ensure the security of such funds.
The Transnet Pension Fund, which has been functional since 1990, and which in its 16 years has accumulated the pensions of so many employees, is an example of a fund that we have a duty to secure.
The MF is pleased about the provisions and amendments contained in the Bill, which clearly provides for an instrument that will secure the efficient management of the fund and will provide security for its beneficiaries.
The MF supports the Transnet Pension Fund Amendment Bill. I thank you.
Thank you, Chairperson. I would like to add my appreciation for the shift in the manner in which we deal with Bills. The transformation of Parliament is an ongoing process for us. Every step that we are taking to achieve that is an important one, and the politics of this Bill and the reasons why the issue requires legislation are crucial for us.
In a sense this step is a very important one; indeed we are taking a giant step to transform our institution, which is supposed to be the people's tribune and is in fact the people's Parliament. For that reason this is a very welcome move.
The reorganisation of the state, which we undertook to do when we took office in 1994, is a challenging task. Some of this work can have negative consequences. But evidence increasingly emerges that where we have done so in an inclusive and participatory manner, involving those affected, the results are almost always very productive and useful. This is one instance where, from indications so far, we are having such results.
Effective representation of the interests of those affected by these measures is crucial, not only in this sector but everywhere else. However, I do want to add my words to hon Hendrickse's view about the Pension Funds Adjudicator, because we may not have an early opportunity to indicate our displeasure that he is not getting support where he should be getting it. I may be saying it before we get full briefings, but the work in this area is very important. It represents the interests of many people whose pensions and savings over the years must be protected, and those who are predators must be prevented from preying on them. We have to protect those who are unable to protect themselves.
This reorganisation is a crucial one. It shows that it is possible to intervene in a manner that satisfies the interests of the economy and those who are affected by the organisations that we are running, and for that reason this is a very significant move and we appreciate it. Thank you.
The ACTING DEPUTY SPEAKER (Ms C-S Botha): Thank you. We have now accommodated everybody who indicated they wanted to participate in the debate. Is there perhaps anybody else?
Chairperson, I am delighted at this opportunity to participate in a new approach to legislation. I made a suggestion 18 months ago to my Chief Whip, and the consummation of that is reflected here. I think it gives us an opportunity to look at the policy implications rather than going in hugger-mugger fashion to a portfolio committee. Or in fact, nobody realises the policy. It comes back to a Second Reading, and what we have is a Minister and others just telling us what the Bill states, rather than the policy behind it. I think it is important that we look at the technical measure and look at the enormous policy implications.
First of all, there has been agreement with the unions, government and Transnet, which itself is a victory, because pension issues are enormously sensitive throughout the world. It is a deferred salary. In the United States they want to privatise pensions. In Europe, because of extensive birth control and fewer births, they have problems with bringing back older people into service. The British are changing their pension laws to make it compulsory for people to work beyond 65.
Here we have, in a situation where the cost of pensions is a burden on the state, a rational, open, transparent, agreed-upon arrangement. I think this is a triumph for the kind of democracy we want to build, because I think the state could have used its power, particularly because of the background of the pension system in South Africa, to impose a solution. Because the background is - and I speak as a former school teacher, many, many years ago - that there was no pension for blacks, or there was a discriminatory pension for blacks.
It is a great tribute to the ANC that, very quietly, and in an orderly fashion, they have brought back the benefits of those who were excluded from the pension scheme. People who work for Transnet are, apart from mining, in one of the most dangerous areas in the world, the most unsafe areas in the world, and recognising the right and entitlement to pensions is recognition by all of us of this fact. We are saluting the older people who have contributed to the building of South Africa.
It is a pleasure therefore to take part in this opening approach to a new style of legislation. We shall allow people who are not in the portfolio committees to do this - I apologise to people who have been in the portfolio committees for usurping their right, but I think this is Parliament asserting its authority to say that policy issues must always be discussed before the Bill goes in a quiet, leisurely way to the portfolio committees. I thank you.
The ACTING DEPUTY SPEAKER (Ms C-S Botha): Thank you very much, hon Asmal. Is there anybody else? If not, hon Minister Erwin, you may respond.
Chairperson, I must say that probably the hon Kader Asmal is the only person I'd contemplate a coup in Parliament with. From his last remarks, he is certainly aware of the powers of committees, and I think he is probably correct.
I thank the speakers, and I also think that what we have done has been a very interesting experiment. I hope we will settle down to a continued process.
In the same spirit, let me just add a few more issues, because I think members have raised some very important and interesting points. Firstly, the origin of the Bill, as you know, was from a strike action. The strike action raised a number of issues around the restructuring and I think, at the end, it is a testimony to the trade union movement and what it can achieve, that we were able to sit down at the end of a protracted strike and identify what would be sensible, equitable and feasible solutions, which would have a real and important impact on many, many members.
I think it is once again testimony to the importance of trade unions that they were able to highlight, particularly in this area of pensions, that there would be real uncertainty and real possible prejudice for members. I am very pleased that we have been able to settle this in the manner we have indicated.
There has been an issue as to whether we should put the exclusion of new members into the Transnet retirement fund from other companies into the rules or into the Act. We have insisted that we believe it should be in the Act, and the reasoning behind that is that, in the main, what we have to do now is already the consequence of some unusual steps that were taken in 2000, and even more problematic steps that were taken in 1990 when funds were set up with pensions which left us with some very difficult legacies. I will comment in a moment on the Second Defined Benefit Fund.
I think we should not create a situation, going forward, where there may be an expectation or a pressure arising that could further complicate this situation. We don't need that. This is already an adjustment to meet the needs of pensioners. I have heard the arguments of some of the unions that maybe there would be benefit in it, but I am not at all persuaded. I think we should have clarity. We should be very clear that there will be this change, and that will be the end of it. We can't have further changes. It is, I believe, in the interest of everybody, pensioners and all.
Let me very briefly comment on some of the speakers' comments. In particular, I welcome the cross-party clarification to pensioners that this will not affect their rights. I think that is very important. It is the thrust and intention of it. It is in the spirit of the settlement we reached with the unions.
I really would urge all members that we should keep telling pensioners that. There is nothing worse than being a pensioner and being somewhat insecure about what is going to happen. Nothing will change. We will make certain that that is the case.
We could not deal with the Second Defined Benefit Fund in this Bill. It, unfortunately, is in an exceptionally complicated position, affected very much by the situation of the revenue coming into the fund, but I think, as has been intimated by Transnet, I am at least pleased that we will probably do something positive in the very near future. We are looking at that, but we could not change this Act, and create unnecessary exposure which could be massively to the detriment of Transnet. Transnet's prime function is to ensure that we build ports - it came up earlier today - the railway lines, and that we get the new pipeline built. That is its prime function.
You must not underestimate what an impact a massive deficit on your pension fund can have on your balance sheet. We are trying to address that. We are seeking many, many ways of doing it, but at least I am confident that we will make some positive announcements in the near future.
Very briefly, on some of the comments made by the hon Cronin, we remember that there are other entities within Transnet that will go into a similar position. We are, as you know, looking at the issue of the South African express. We, in terms of the previous settlement, agreed to undertake an investigation on Autopax. We have now reported back to the unions, and I think fairly soon we will be able to indicate where that entity will go. I think it is important that we solve those issues.
Very briefly, on the implications ...
The ACTING DEPUTY SPEAKER (Ms C-S Botha): Very briefly.
Very briefly, on the implications of whether you can or cannot attach pension funds, this is a much wider issue. It can't be dealt with here, and I think you are aware of that. It has got its pros and it has got its cons. I think that if we highlight it here, it might be something that spins out, and can be looked at again.
Thank you, Madam Chairperson, for the indulgence. I just hope that at the Second Reading, we will get support.
Debate concluded.