1. TRANSPORT PENSION FUND Transnet sub-fund 15 NOVEMBER 2011

2. AGENDA  Background  Rule Amendments  Valuation results  Trustees duties/funding  Questions

3. BACKGROUND  Number of meetings in 2010/11 between Transnet and Task Team  Recommendation by Portfolio Committee  75% of CPI prospective increases  3.2% uplift  5 months pension once-off  TPF is a separate entity which is managed independently from other Transnet funds  TPF – 3 sub funds (Transport Pension Fund post 2007)  Transnet sub fund has 4 440 pensioner members and 809 active members  No bonuses paid to date - rule amendments awaiting approval

4. RULE AMENDMENTS  Rule amendments long awaiting approval (June 2010)  Lots of pressure on employer, trustees iro pensioner expectations and comparison with TSDBF  Different rules per sub-fund :  Current : All sub funds - pen increases at 2%  Amended : Transnet - pen increases at 2% plus ad hoc bonuses  Amended : Prasa - pen increases at 75% CPI plus ad hoc bonuses  Amended : SAA - pen increases at 5.5% hurdle rate (75% CPI) plus ad hoc bonuses  None of Portfolio Committee recommendations can be paid based on current rules  Portfolio Committee recommendations would require another set of amendments subject to employer approval being obtained

5. VALUATION RESULTS (31 March 2011) – PC Recommendations  The Transnet Sub Fund can afford the cash flow consequences of all PC recommendations – the implementation method is to be determined, subject to employer approval Scenario (R’m)TPFTransnet sub fund Assets6 9084 485 Current Liability4 5392 967 PC recommendations1 213792 Reserves816554 Total Liability6 5684 313 Surplus/(Deficit)340172 Funding level105.2%104.0%

6. TRUSTEES DUTIES  It is not possible to give benefits outside provisions of rules and legislation  The Board of Trustees need to ensure that the fund’s financial condition remains sound (including reserves)  I can assure you the Transnet sub fund Board of Trustees is committed in providing better benefits to its pensioners

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