CSC dissolves pension fund

By Eric Chiriga

THE Cold Storage Company (CSC) could be forced to dissolve its pension fund due to serious financial problems, businessdigest has established.



tify>Confidential documents seen by businessdigest reveal that the administrators of the fund, Marsh Insurance Brokers wanted the fund to be dissolved.


The move will affect hundreds of employees at the parastatal, which has been in the red for the past decade.


In a memorandum to all branch managers, directors and workers’ representatives, CSC human resources director Moses Mrewa announced the possible termination of the pension scheme.


“The financial challenges that the company is facing have resulted in the company’s failure to remit pension contributions to Marsh,” Mrewa said.


“In view of this, Marsh has proposed that the pension fund be converted to a paid-up status, which effectively means the cessation of the pension scheme.”


Mrewa further said that if the proposal is adopted, both employer and employee contributions will cease and the fund’s assets including contribution arrears and loss of return on the outstanding contributions will be evaluated to determine each member’s share of assets.


However, the members’ share will be payable on attainment of retirement age.


If the pension scheme is dissolved, CSC will only be required to continue contributing to the National Social Security Fund.


Mrewa however said management was confident that the company’s fortunes would have significantly improved by mid next-year.


“Riding on this confidence and the need to safeguard members’ interests, management is of the view that the pension fund remains active,” said Mrewa.


He said the contribution arrears should be amortised and cleared over a reasonable period of time starting mid next year when they expect their turnaround strategies to start bearing fruit.


He said the principal officer of the fund will call for a meeting of the board of trustees whose outcome would be presented to the Commissioner of Insurance and Pension Funds.


CSC has been struggling to operate viably for the past three years due to huge debts.


CSC has been failing to remit pension contributions to Marsh due to cashflow problems.


Marsh refused to comment on when contacted this week.


“Marsh cannot disclose any information without consent of the principal officer,” said a Marsh official responsible for the CSC account.