The Tribune

By NEIL HARTNELL

Tribune Business Editor

THE value of the City Markets' staff pension fund's main asset "supersedes" what is owed to plan beneficiaries by some $2 million, one of its trustees saying yesterday that he hoped to conclude a deal for its sale "within the next week".

Emphasising that "in no way, shape or form has the pension been in danger" because of the five-store supermarket chain's financial woes, Mark Finlayson disclosed to Tribune Business that he felt he had found the "right person" to acquire the former City Markets head office building on the East-West Highway.

And he also revealed that, due to accounting deficiencies stemming from the absence of proper software, some beneficiaries of the Bahamas Supermarkets Profit Sharing Retirement Plan had been "overpaid" - paid more than they were due from the pension scheme - between 2004-2011.

Acknowledging staff concerns over the security of their retirement 'nest egg', Mr Finlayson told Tribune Business: "In no way, shape or form has the pension been in danger, because the value of the building and what is owed to plan beneficiaries. Sell the building, and it easily covers people's retirement savings.

"In terms of what's left outstanding to vested members, the value of that building [City Markets' former head office] supersedes that amount by a $2 million margin or more.

"In the worst case scenario that I have seen, the value of that building supersedes what is owed to them by $2 million. I have one buyer who's very interested, and I believe he's the appropriate person and we will get a good value for it. He seems to be the right guy."

Mr Finlayson declined to name the party he was negotiating with, but added: "I'm hoping to sign a deal with him within the next week or so. It's a real estate deal, so it will be [closing] 90 days after we sign."

Concerns over the Bahamas Supermarkets Profit Sharing Retirement Plan first surfaced under the disastrous BSL Holdings ownership, the 2010 accounts for City Markets' operating parent, Bahamas Supermarkets, showing that some $971,452 in rental payments on the head office were owing to the pension fund as at June 30 that year. And no contributions had been made to the plan by the company during the years 2008-2010.

Mr Finlayson inherited those issues when he and his family acquired majority control in November 2010 for just $1, and he said yesterday: "One thing that is very important is that 90 per cent of those people who have any claim at this point have been paid out since I've been on board.

"There's one person who turned 65 this year, and whose benefits need to be paid out in full this year. Everyone else during my time has either been paid out in full or there's monies left over."

He added, though, that a report by forensic accountant John Bain, which he requested after his family's Trans-Island Traders vehicle gained 78 per cent majority control at City Markets, uncovered accounting issues impacting the staff pension fund.

"Certain people got paid more than what was due to them, and the reason given was that they did not have the software Winn-Dixie had to do proper calculations," Mr Finlayson told Tribune Business. "It had been done for generations before by Winn-Dixie and was pretty straightforward, being based on a trust agreement.

"My findings were that a lot of overpayments were put in place, and as a result a lot of people, especially the more senior people between the years 2004 up to 2011, have been overpaid. I'm not talking small amounts - some are small, but some are extraordinary amounts."