1

TRANSNET RETIREMENT FUND

MARCH 2012 RESULTS

Presentation to the Audit Committee5 July 2012

2

Contents of presentation

Overview

Membership

Income

- Contributions- Investment income- GLA and PHI

Expenses- Benefits & Transfers- Administration- Investment

Reserves

Assets and Liabilities

3

Salient features

MEMBERS’ ACCOUNT

Mar 2012 R38,415 m R2,8bn

Mar 2011 R35,608 m R2,9bn

Member account up 7.9% (Mar 2011: up 8.8%)

RESERVES

Mar 2012 R454 m R113m

Mar 2011 R341 m R62m

Reserve account up 33.1% (Mar 2011: up 22.2%)

4

Salient features

INVESTMENTS

Mar 2012 R37,850 m R2,8bn

Mar 2011 R35,040 m R2,9bn

Investments up 8.0% (Mar 2011: up 8.9%)

MEMBERSHIP

Mar 2012 62,326 2,012 members

Mar 2011 60,314 1,647 members

Membership up by 3.3% (March 2011: 2.8%)

TRANSFERS AND BENEFITS No. Exits Avg./Exit

Mar 2012 R 2,965 m 2,798 members R1,060m

Mar 2011 R 2,670 m 2,669 members R1,000m

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Overview of results

INVESTMENT PORTFOLIO RETURNS

Wealth Creator 12.52% 10.58% 7 years 5.5% 9.90% 8.10%Wealth Consolidator 11.48% 3.68% 5 years 4.0% 10.80% 0.70%Inflation Protector 8.01% 1.54% 3 years 3.0% 7.60% 4.00%Wealth Guarantor 7.07% 3.10% 2 years 2.0% 5.80% 1.40%

2011

Investment portfolio Annualised real return

Annualised real return

Period

Objective Annualised real return / period

2012

Absolute return

Absolute return

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Changes in membership

-2.3%Yearly % change -0.7% -1.3% -1.8% -0.04% -1.7% -3.9%

2006 2007Member movements during the period

3 695 #####Adjust-ment ( 255) 863 Transfer out 59 884With-drawal 2 502 #####Retire-ment 835 997

66

13

5

65

67

8

64

81

4

63

62

5

63

60

2

62

49

3

61

04

7

60

31

4

62

32

6

30 000

35 000

40 000

45 000

50 000

55 000

60 000

65 000

70 000

2003 2004 2005 2006 2007 2008 2009 Mar 2011 "Mar 2012

Number of Members

• Membership @ 62 326 reflect increase of 3.3% (2,012 members)

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Changes in membership

Increase in membership of 2,012 (3.3%) is primarily due to:

adjustments 28 23.9% new members 460 10.2% transfers in 37 -56.1% withdrawals 93 7.9% retrenchments 39 -79.6% retirements 92 9.14%

Adjust New Trfs in Withdw Retmnt Retren Deaths CancelMar 11 ( 117) 4 521 66 1 179 1 007 49 434 154

Mar 12 ( 145) 4,981 29 1,272 1,099 10 417 55

Change -28 460 -37 93 92 -39 -17 -99

( 500)

500

1 500

2 500

3 500

4 500

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Changes in net assets and funds

Total income 5 420 087 809 024 6 229 111 5 611 193 906 049 6 517 242

Total expenses 197 665 425 781 623 446 191 030 442 287 633 317

5 222 422 383 243 5 605 665 5 420 163 463 762 5 883 925

Total transfers and benefits 2 348 890 321 077 2 669 967 2 613 349 351 676 2 965 025

Net income after transfers and benefits 2 873 532 62 166 2 935 698 2 806 814 112 086 2 918 900

Balance at the beginning of period 32 735 144 278 609 33 013 753 35 608 259 341 192 35 949 451

Reversal of member allocation ( 92) 92 - ( 17) 17 -

Switching fee ( 324) 324 - ( 245) 245 -

Balance at the end of period 35 608 260 341 191 35 949 451 38 414 811 453 540 38 868 351

Changes in net assets and fundsfor the year ended 31 March 2012

R'000

Net income before transfers and benefits

Members' account

R'000

Reserves TotalMembers' account

Reserves

Mar 2011 Mar 2012

Total

Total contributions & investment income R288m (R6,5bn – R6,2bn) - 4.6%

Total expenses R9.8m (R633m – R623m) - 1.6%

Total transfers and benefits R295m (R2,9bn – R2,7bn) - 11.0%

Net income after transfers and benefits R17m - 0.57%

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Contributions received and accrued

1 573 947 465 678 2 039 625 1 768 574 526 844 2 295 418

10.2% 9.3% 10.0% 12.4% 13.1% 12.5%

TotalMembers' Account

Reserves Total

Mar 2012

R'000

Reserves

R'000Income

Mar 2011

Contributions received and accrued - member and company

Members' AccountChanges in net assets

and fundsfor the year ended 31 March 2012

• Contributions at 12.5% due to:

• increase in salaries – avg. Transnet junior staff 8.5% • increase in new membership by 460 ( 4981 vs. 4521)

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Investment income

3 846 140 23 033 3 869 173 3 842 619 27 599 3 870 218

-37.3% -51.5% -37.4% -0.1% 19.8% 0.0%

Members' Account

Changes in net assets and fundsfor the year ended 31 March 2012

IncomeMar 2011

Investment income

Mar 2012R'000

Reserves

R'000

TotalMembers' Account

Reserves Total

Mar 2011 Mar 2012R'000 R'000

528,185 504,865 858,610 1,036,859

Performance fee refunded 56,205 25,324 115,267 117,136

Net realised profit 2,310,906 2,186,034 Total investment income 3,869,173 3,870,218

Interest receivedDividends

Net rentals

Investment income (gross) R1,0m 0.03%

Inflation:

• March 2012: 5.96%• March 2011: 4.14%• March 2010: 5.11%• March 2009: 9.88%

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• Amounts in respect of reinsurance• GLA proceeds comprise notified death cases• PHI proceeds comprise cases that the insurer agrees to pay• GLA premium 2.3% (March 2011: 39.0%) • PHI premium 6.9% (March 2011: 2.5%)

Group Life Assurance & Permanent Health insurance

258 040 62 273 320 313 277 639 73 967 351 606

Expenses ( 303 463) ( 77 966) ( 381 429) ( 310 402) ( 83 370) ( 393 772)

( 45 423) ( 15 693) ( 61 116) ( 32 763) ( 9 403) ( 42 166)

Mar 2011 Mar 2012

P H ITotal TotalG L A

Total

R'000

P H I G L AChanges in net assets and fundsfor the period ended 31 March 2012

R'000

Income

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Administration & Investment Expenses

197 665 44 352 242 017 191 030 48 515 239 545

30.1% 5.4% 25.3% -3.4% 9.4% -1.0%

Mar 2011

R'000

Reserves TotalReserves

R'000

TotalMembers' AccountChanges in net assets and funds

for the year ended 31 March 2012

Expenses

Mar 2012

Members' Account

Administration and investment expenses

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Transfers to other funds (growth) 2 214 - 2 214 75 - 75

Benefits 2 426 724 321 077 2 747 801 2 649 831 351 676 3 001 507

( 80 048) - ( 80 048) ( 36 557) - ( 36 557)

Total transfers and benefits 2 348 890 321 077 2 669 967 2 613 349 351 676 2 965 025

% Change (year-on-year) -29.5% 58.8% -18.4% 11.3% 9.5% 11.1%

R'000

Less: Transfers from other funds

Transfers and benefitsfor the period ended31 March 2012

Members' account

R'000

Reserves TotalMembers' account

Reserves

Mar 2011

Total

Mar 2012

• Total transfers and benefits 296m 11.1% (R2,965bn - R 2,669bn)

• Benefits R612m 9.2% (R3,002bn - R 2,748bn)

• Transfers from other funds: 29 members (March 2011: 66 members) – average benefits accrued R1,261m (March 2011: R1,212m)

• Transfers to other funds represents interest income accrued for transfers raised in the previous financial year

Transfers and benefits

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Benefits

  Mar 2011 Mar 2012

Transfers from TPF R 79m R 35m

Transfers from other funds R 957k R1,5m

Retirement R 1,4bn R 1,6bn

Death R 555m R 578m

Withdrawal R 685m R 722m

Retrenchment R 39m R 8m

Adjust New Trfs in Withdw Retmnt Retren Deaths CancelMar 11 ( 117) 4 521 66 1 179 1 007 49 434 154

Mar 12 -145 4,981 29 1,272 1,099 10 417 55

Change -28 460 -37 93 92 -39 -17 -99

( 500)

500

1 500

2 500

3 500

4 500

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Balance sheetMar 2011 Mar 2012

R'000 R'000

ASSETS

Non-current assets 35 039 556 37 849 872

Current assets 1 622 078 19 222 463

Total assets 36 661 634 57 072 335

FUND AND LIABILITIES

Members' fund and surplus account 35 608 259 38 414 811

Reserves 341 192 453 540

Total fund and reserves 35 949 451 38 868 351

Non-current liabilities 20 560 22 808

Current liabilities 691 623 881 176

Total fund and liabilities 36 661 634 39 772 335

Balance sheetat 31 March 2012

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Reserves

Year General Warranty Total Distributions

2012 R454m R Nil R454m R Nil

2011 R341m R Nil R341m R Nil

2010 R279m R Nil R279m R321m

2009 R454m R10m R464m R52m

2008 R241m R56m R297m R Nil

2007 R163m R51m R214m R Nil

2006 R66m R Nil R66m R Nil

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Summary of changes Mar 2011R’000

Mar 2012R’000

Opening balance 278,609 341,192

Contributions 465,678 526,844

Investment income 23,033 27,599

Switching fee 324 245

Member allocation withdrawn 92 17

Reinsurance premiums (381,429) (393,772)

Administration expenses (44,352) (48,515)

Benefits paid from reserve (764) (70)

Closing balance 341,192 453,540

Reserves