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City Markets Pension Plan Suffers $758k Overpayment

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Bishop Simeon Hall

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The City Markets staff pension plan overpaid some beneficiaries by a collective $757,668 between 2004-2010, although some $4.216 million was left available to pay benefits as at end-January 2012.

The details were contained in documents filed with the Supreme Court, which include an audit of the defunct supermarket chain’s employee pension fund – the Bahamas Supermarkets Profit Sharing Retirement Trust – by accountant John Bain for the seven months ended January 31, 2012.

They were attached to affidavits filed by staff for James Thompson, the Freeport-based attorney acting for a number of former City Markets staff. The documents noted that the pension fund owned several liquid assets, including three Paradise Island Bridge Authority bonds, plus the equipment and leasehold improvements at the former Cable Beach store that it acquired in the controversial sale and leaseback deal.

Using Mr Bain’s audit report, Malissa Saunders, a member of Mr Thompson’s staff, alleged: “From the said report, the retirement plan owns three bonds valued at approximately $300,000, and from the said report the retirement plan owns refrigeration equipment, which I am informed is the subject of a sale at a consideration of $800,000.

“I am informed by the said James Thompson that the said bonds have been redeemed and are available for distribution among the pensioners, and that the proceeds from the sale of the said equipment may also be ready for distribution.” Ms Saunders conceded, though, that this had not been confirmed.

These details provide a new twist to the ongoing controversy swirling around the City Markets employee pension fund. The saga reared its head again last week, after Whanslaw Turnquest, who has become a spokesperson for the former staff, accused the plan’s trustees of trying to disenfranchise beneficiaries from the protection they currently enjoyed by seeking their consent to transfer the trust’s assets to a new company, the Bahamas Supermarkets Retirement Plan Ltd.

But Tribune Business was told that Bishop Simeon Hall was acting as an independent overseer of this process, which was designed to give former City Markets staff a choice between whether pension payments were made via their attorneys or direct to them.

This newspaper has seen documents where attorneys are charging 20 per cent of the sums paid out to City Markets pension plan beneficiaries as fees for their services.

Bishop Hall confirmed his role to Tribune Business yesterday, disclosing that he had spend five-six hours per day last week at the office where the trustees for the City Markets pension plan have been issuing certificates to beneficiaries.

These certificates are akin to shares in the Bahamas Supermarket Retirement Plan Ltd, equal to the amount each employee has vested, and Bishop Hall said they should yield a cash payout when the fund’s main asset – the former City Markets headquarters building on the East-West Highway – was sold.

Tribune Business understands that the Government, via the National Insurance Board (NIB), is again looking at purchasing the property for around $8 million – a sum that many believe is inflated.

Still, in contrast to Mr Turnquest, Bishop Hall praised the asset transfer and share certificate plan involving the new company. “It’s obvious that some wrong has taken place with this myriad of problems,” he said of the pension fund, but I am very impressed with this new Board of Trustees that are attempting to shed some light on a dark situation.

“I would encourage all former employees to make good on this situation. I think they [the trustees] will make good on those certificates once the building is sold. They have asked the Government to purchase that building, and if the Government did, they will take that cash and turn it over to the former employees.”

Bishop Hall added that the former City Markets employees had “been through a lot”, and said: “When capitalism goes awry, it is the poor that suffer.

“But the bottom line, whether they are for or against this, is the sale of the building. If the building is sold, the trustees can make good on their promises.”

Tribune Business, meanwhile, understands that Mark Finlayson, principal of Trans-Island Traders, the Finlayson family-owned vehicle that owned a 78 per cent majority stake in City Markets, has resigned as a pension fund trustee.

That leaves Connie Rolle and Christine Turnquest as the remaining trustees.

Mr Bain’s audit, meanwhile, showed that the City Markets pension fund held $8.51 million in total assets at end-January 2012, some $7.379 million of this sum being the former headquarters building.

With a revaluation surplus of $4.204 million, the accounts stated that net assets available for benefits totaled $4.217 million. For the period to end-January 2012, the pension plan suffered a $92,379 loss, following a $500,767 loss for its 2011 financial year.

No contributions were made to the City Markets staff pension plan by their employer during the years 2010-2012, and the accounts noted that the company owed it $2.078 million in unpaid rent on the head office and warehouse buildings as at end-January 2012. Given that the supermarket chain had closed, this sum was provided for, as there was an “unliklihood” that this sum would be paid.

Comments

proudloudandfnm 1 year, 3 months ago

Bishop Hall confirmed his role to Tribune Business yesterday, disclosing that he had spend five-six hours per day last week at the office where the trustees for the City Markets pension plan have been issuing certificates to beneficiaries.

These certificates are akin to shares in the Bahamas Supermarket Retirement Plan Ltd, equal to the amount each employee has vested, and Bishop Hall said they should yield a cash payout when the fund’s main asset – the former City Markets headquarters building on the East-West Highway – was sold.

Tribune Business understands that the Government, via the National Insurance Board (NIB), is again looking at purchasing the property for around $8 million – a sum that many believe is inflated.

Well it looks like Perry can keep a promise...

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