The Pensions Regulator has, for the first time, used its powers to ban a named individual from acting as a trustee of a trust-based pension scheme. The Regulator had been alerted regarding the individual’s conduct by a whistleblower’s report and judged that the person was unfit to perform his role.
The individual was the chairman of the trustees of a pension scheme and a HR manager and had misrepresented the pension benefits of executive members to senior management in such a way as to raise transfer values by as much as £13.4 million, thereby increasing the pension liabilities of the scheme and the sponsoring employer.
The individual falsely claimed that the pension of an executive member accrued at a rate of 1/30th of final pensionable salary for each year of service and that the executive was entitled to receive unreduced benefits from the age of 50. This information was presented as an entitlement rather than a proposal to augment, despite the individual knowing that it would have a detrimental effect on the scheme.
The individual also accepted for himself an “exceptionally favourable pension”, which affected the benefits of other scheme members. This was done without informing or seeking approval from any of the other trustees. This publication is written as a general guide only. It is not intended to contain definitive legal advice which should be sought as appropriate in relation to a particular matter.