THE boss of a major bus operator in the Borders has confessed his company is “experiencing severe cashflow problems at the moment”.
Ewan Farish, director of Munro’s of Jedburgh, made the admission in a letter to employees who are members of the firm’s group pension scheme.
The letter turned out to be a precursor of bad news for members of the scheme, for it was later confirmed that money extracted weekly from their wage packets towards their Scottish Life pension plan has not been paid by their employer since September last year.
“If my pension contribution is anything to go by, I reckon that, since then, the company has taken around £7,000 from employees who are in the pension plan for the past four months and have not passed it on to Scottish Life,” said one irate member of staff. “As a result, the pension scheme has been declared paid-up, or closed, and I must make my own arrangements from now on.
“However, I am not alone in being staggered that the firm seems to be in such dire financial straits that it has taken our money and not paid it into the scheme.” The estimate of the amount the employee, who does not wish to be named, alleges is owed by the company is based on his assertion that “around 20” members of Munro’s staff had been in the scheme.
TheSouthern has seen copies of the letters which the Munro’s staff in the pension scheme received.
The first, from Mr Farish on January 19 and headed Munro’s of Jedburgh Ltd Pension Scheme, stated: “Due to the particularly difficult trading conditions over the past two months, due to weather conditions, fuel prices increase etc, we are experiencing severe cashflow problems at the moment.
“As a result we have been unable to meet our scheduled monthly payment to Scottish Life in respect of the above pension scheme.
“As you are no doubt aware, our payments normally run two months in arrears and therefore this non-payment means that the scheme will be three months in arrears. Scottish Life are aware of the situation. However, they have a legal duty to formally write to each member and advise them. You should therefore receive a letter from Scottish Life in the next few days.”
On January 21, the employees received a letter from SBC Financial, the Edinburgh-based firm which administers the pension scheme.
“As you are aware, the scheme is now three months in arrears and as such will now be made paid-up. This means that no further contributions will be paid from Munro’s.
“Munro’s are not obliged to make any missed employer contributions, but are bound to pay any deductions made from your salary to the scheme. Scottish Life will report the situation to the Pensions Regulator with their next monthly report.”
The letter went on to advise members to consider cancelling their membership of the scheme and make further increased contributions from their personal bank accounts.
On February 2 came confirmation from Scottish Life as follows: “Regarding outstanding contributions, we note that premiums due from 1st November 2010 have not been paid. Your policy will be made paid-up as a consequence.”
The irate employee said he had since discovered from Scottish Life that the last payment made by Munro’s was in September.
Mr Farish said the situation was “symptomatic” of current economic conditions, particularly the price of fuel.
“I should stress that only a small percentage of our employees are in the pension scheme and none of them has raised concerns with me over this matter,” claimed Mr Farish.
“It should also be noted that employee contributions are owed to the scheme, not the individuals, and will be paid at some point.”