Transnet Pension Fund Amendment Bill: deliberations
Meeting Summary
A summary of this committee meeting is not yet available.
Meeting report
PUBLIC
ENTERPRISES PORTFOLIO COMMITTEE
17 October 2006
TRANSNET PENSION FUND AMENDMENT BILL: DELIBERATIONS
Chairperson: Mr P Hendrickse (ANC)
Documents handed out:
Transnet Pension Fund Amendment Bill: B30-2006
Transnet
presentation on Bill – as at 13 October 2006
South African Transport
and Allied Workers Union (SATAWU)
Proposed additional
amendments on the Transnet Pension Fund Act
SUMMARY
The Committee considered the Transnet Pension
Fund Amendment Bill by seeking clarity on the specific wording of the Bill. A
clause-by-clause informal discussion led by Transnet
clarified that the Bill would apply retrospectively to 11 November 2005. The
discussions also noted the separation of the three sub-funds and the procedure
for valuation of these funds. The amendments would permit the recovery of debt
from pension benefits only under the provisions of the Divorce Act, 1979 and
the Maintenance Act, 1998. Deliberations will continue on 20 October.
MINUTES
Clause-by-clause Discussion of the Bill and deliberations by Members
Ms C Prentice (Transnet Project Manager), at the
request of the Chairperson, proceeded to discuss each clause of the Bill. The
Chairperson suggested that Members raise comments and queries as a clause is
tabled.
General
The meeting of 13 October 2006 mandated a
sub-committee to further discuss the Bill with the Department and Transnet. The following deliberations are as a result of
the sub-committee discussions and only key issues are raised.
Clause 1
Ms Prentice stated that the amendments are intended to protect members of Transnet and the State-owned enterprises (SOEs). Clause 1 deals with definitions
where actuary is defined as the person appointed to valuate the fund. A
valuator is a consultant specifically appointed to valuate the fund. Dependent
pensioners are the active members who receive benefits such as spouses and
children. An employee was defined as a Transnet or
SOE employee. Ms Prentice commented that the term “rules” should be in lower
case. A principal employer would be Transnet and
other SOE employers. She also confirmed that the definition of rules had been
expanded to include special rules. The term Minister is defined as the
responsible major shareholder and the wording “Minister of Public Enterprises”
should be deleted. The fund would henceforth be referred to as the Transport
Pension Fund.
Mr Y Carrim (ANC) asked how
one would differentiate between Transnet and a SOE.
Ms Sandra Coetzee (Deputy- Director General,
Department of Public Enterprises (DPE)) explained that a SOE was a self-funded
company while Transnet being a public entity depended
on funding from the fiscus.
Mr Carrim commented that
the definition of a SOE is broad and could include any state department. He
suggested that the State Law Advisers look at how this definition will change
with the new SOE legislation expected next year.
The Chairperson responded that it is not the duty of the State Law Adviser to
anticipate what the Bill would look like next year.
Ms Coetzee explained that this definition is for the
purposes of this Act and will not permeate other legislation.
Ms Prentice suggested that a SOE could also be called “other employer”. She
further stated that special rules are related to the subfund,
South African Airways (SAA) and the SA Rail Commuter Corporation (SARCC). The
definitions of Transnet and Transnet
group of employers remain the same as in the Act.
Mr Carrim noted that the
Department of Transport is not state-owned, it is the State. A different term
that would clarify the definition must be found.
Ms Prentice responded that Transnet is happy with the
definition but will take advice from the Committee in this regard.
Clause 2
This clause deals with the name change from Transnet Pension Fund to the Transport Pension Fund.
Clause 3
Ms Prentice explained that the employer was responsible for obligations payable
from revenue and that Clause 3 sets out clearly defined parameters for the
treatment of obligations which may arise.
The Chairperson asked what would happen if there was a shortfall.
Ms Prentice responded that this section related to employer contributions. It
also related to the Legal Succession Act based on specific terms of reference.
This is an historic clause.
Clause 4
Ms Prentice stated that this clause explained how the new fund and the old
pension fund would become the Transport Pension Fund. Sub-clause 4(a) would
allow new sub-funds when for example Metrorail joins
the fund next year. Sub-clause 4(b) states how active members, pensioners and
dependent pensioners are treated. She further explained that there are a number
of assumptions that are made, for example the assumption of mortality rate.
Mr J Stevens (DA) questioned how the rights of
existing members would be affected, if at all.
Ms Prentice said the rights of members would not be affected.
Clause 5
Ms Prentice stated that this clause dealt with the establishment of the
sub-fund board. It also clearly sets out the power and duties and special rules
of the board. The administration of the fund will be outsourced. She proposed
that the general rules be approved by the Minister only where there were financial
implications. The Department of Public Enterprises supported this proposal.
Mr J Stevens (DA) asked who determined when disputes
would be referred to the Minister.
Ms Prentice confirmed that an evaluator would be appointed and that the
Registrar of pension funds will not approve rule amendments where there are
financial implications.
Clause 6
This clause provided that all sub-funds
would be subject to actuarial evaluation.
Clause 7
Ms Prentice explained that the valuator is appointed by the Trustees and
not by the Minister. Each sub-fund must have its own valuator. The Pensions
Fund Act determines what goes into an actuarial evaluation.
The Chairperson asked if the Minister of Finance would be the final guarantor.
Ms Prentice said this was a good legal question and that further clarity would
be needed.
Clause 8
Ms Prentice explained that in terms of the Maintenance Act pensions could
be attached.
Mr Stevens asked if the pension fund would not be an
easy target for the collection of debt.
Ms R Hunter (Transnet attorney) explained that the
recovery of debt is governed in terms of the Act. The Treasury is considering
the viability of this legislation in relation to the recovery of debt.
Clause 10
Ms Prentice explained that 'or her' should be substituted where there is
reference to 'him' only.
Mr Stevens stated that money could only be collected
from the fund, where a member has committed fraud, theft or absconded.
Ms Hunter confirmed that this issue was being raised and was on the National
Treasury agenda.
Mr H Bekker (IFP) asked if
a loan transaction was between the pension fund and employer or employer and
employee.
Ms Prentice said both instances were covered.
Clause 13
This clause set out the obligations of the
State similar to those provided for in Section 16 of the Legal Succession Act.
Clause 14
Ms Prentice explained that section C would be deleted.
The Chairperson asked that the Committee elaborate rather than delete the
section.
Clause 15
Ms Prentice explained that Clause 15 of the Bill was complex. It determined
who would belong to the fund. This issue will continue to be debated with labour.
Ms Hunter stated that the inclusion of SAA and Metrorail
had been negotiated with the trade unions and was accepted by the Minister. She
also confirmed that this section was fraught with corporate governance issues.
General Discussion
The Chairperson delivered a short history of the Bill and explained that
only when the issue of vested tax rights came up was there a need for a Bill to
be drafted. The initial position of Transnet was that
it accepted the Bill. He also stated that in terms of the Labour
Relations Act members could be transferred to another fund when a business is
sold.
Ms Prentice confirmed that SAA was in the process of setting up a fund for new
employees.
Mr Carrim felt the
Committee must avoid raising the same issues over and over. The Bill aimed to
protect the vested interests of the members and complied with current Labour legislation. The powers of the board must be
included in the Act. He also requested that these issues be followed up at the
next meeting of the Committee on 20 October 2006.
The Chairperson stated that the onus was on the Department to negotiate if
Parliament is to pass the Bill before adjourning for the year.
The meeting was adjourned.
Audio
No related
Documents
No related documents
Present
- We don't have attendance info for this committee meeting
Download as PDF
You can download this page as a PDF using your browser's print functionality. Click on the "Print" button below and select the "PDF" option under destinations/printers.
See detailed instructions for your browser here.