CORNERED by 1 300 workers who have approached the High Court to claim millions of dollars in unremitted pension contributions, the State-run Cold Storage Company (CSC) finally entered a plea to defend itself last week, setting the stage for a potentially bruising legal battle.
A recent audit of the CSC pension fund exposed massive manipulation of funds that has sparked the fallout which could become a test case in Zimbabwe, where hundreds of cash-strapped firms have been deducting pensions from workers but not remitting.
Thousands of workers are facing the same predicament, only realising after resigning or retirement that they cannot get their savings of many years because companies have not been remitting their pension contributions to the administrators of their schemes. Workers’ legal counsel, Rodgers Matsikidze told the Financial Gazette’s Companies & Markets (C&M) that following their August 1 High Court application, which CSC had not defended after the 10 days it had been given to respond, the beef processor had now entered a plea to defend.
“They (workers) have not been given the money,” Matsikidze told C&M. “They (CSC) are defending the case. They have entered a plea to defend. They will be represented by Dube, Manikai and Hwacha,” said Matsikidze, adding that he was yet to be furnished with the papers. A series of pension fund transactions by made by CSC, which is battling to recover from a devastating crisis triggered by prolonged under-capitalisation, left US$4,6 million unaccounted for, according to court papers seen by this newspaper.
The disappearance of US$4,6 million, which was in the form of Treasury Bills (TBs) issued by the central bank during the Zimbabwe dollar era, was unearthed by Beacon Actuarial. The TBs, as workers now allege in papers before the High Court, were never transferred to Marsh Insurance Brokers, which had became the new manager of the CSC pension fund after it had been moved from Old Mutual Life Assurance Company in 2001. The TBs had not matured when CSC bosses transferred the pension fund account.
Pension funds in the form of TBs were to be transferred to Marsh once they were liquidated on maturity. The High Court papers filed on August 1, 2014 argued that there was no evidence showing that the TBs were transmitted to Marsh after their maturity, and that CSC had not remitted contributions since 2001, even after deducting contributions from staff.
These developments mean those retiring from CSC are not accessing their pensions at a time when an economic crisis, highlighted by liquidity constraints, has dealt a blow on consumers, the majority of them unemployed. “This transfer saw the transfer of assets of the Cold Storage Company Limited Pension Fund to Marsh Insurance Brokers but not all assets were transferred because some of the assets were in the form of Treasury Bills which matured at a later date,” CSC workers argued in the High Court appeal filed Matsikidze.
“However, upon maturity there is no proof as to what became of the Treasury Bills. In essence there was a deficit in the CSC Pension Fund at the time of the transfer in the sum of US$4,570 686…despite the fact that the defendant (CSC) was deducting monies for pension contributions from employees there was a huge deficit upon the transfer.” Matsikidze said massive damage had already been inflicted on the pension fund. “Technically, the workers have no pension,” he said.
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