Establishment of the Fund

Transnet Second Defined Benefit Fund (TSDBF) was established on 01 December 2000 in terms of the Transnet Pension Fund Amendment Act, 1990 (Act 62 of 1990) as amended by the Transnet Pension Fund Amendment Act, 2000 (Act 41 of 2000). All pensioners who retired until 30 November 2000 were transferred from the Transnet Pension Fund to the TSDBF on 1 December 2000. From this date the fund became a closed fund and no new members were allowed to join the fund. The Fund is an independent legal entity, and as such is capable of acquiring its own assets.

Nature of the Fund

The Fund is a closed defined benefit fund arrangement and an independent legal entity of which the management, control and administration of the Fund vest in the Board of Trustees. The effect of this arrangement is that investment risks are carried by the Employer (Transnet) and ultimately by Government and not the pensioners. The value of benefits is determined through a fixed formula as determined in the Rules of the Fund.

Objectives of the Fund

The objectives of the Fund are to provide pension and death benefits to or in respect of the Fund’s pensioners as well as their dependants in accordance with the Rules of the fund.

Ad hoc bonus payments and annual inflationary increases are subject to affordability and the Fund endeavors to achieve the highest possible level of investment performance, within acceptable levels of risk, to provide for such benefits. Only prudent investment and administrative practices are applied.

In the quest to achieve its overall objective, due cognisance shall be taken of the Fund’s policies on Black Economic Empowerment and Socially Responsible Investment which is reflected in the Investment Policy Statement. Social responsibility in the South African context will be pursued as a desirable non-financial objective, provided that this does not compromise the overall objective.