Personal PensionJun 11 2015

Administrators of £19m schemes placed in liquidation

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Administrators of £19m schemes placed in liquidation

Two pension administration firms, which acted as trustee for schemes that received around £19m in transfers from retirement savers, have been placed into provisional liquidation by the High Court.

The companies were the trustees of the Henley Retirement Benefit Scheme and the Capita Oak Pension Scheme, which had received a combined £19.4m from members of the public who the court was told had transferred their pension pots on the promise of greater returns.

Both schemes invested savers’ money into storage unit assets and have been the subject of concerns over ongoing liquidity.

Some savers in the Capita Oak scheme also received cash upfront under the age of 55, opening them up to unauthorised tax charges of 55 per cent, plus potentially further penalties which the government has said it will not waive.

Hearings in the High Court took place earlier this month and the orders placing the companies into provisional liquidation follow applications issued by the Insolvency Service on behalf of the Secretary of State for Business, Innovation and Skills.

Omni Trustees was placed into provisional liquidation on 3 June. It was the trustee of the Henley scheme, which received £8.6m from members of the public. Of this, £3.6m was invested in self-storage units and £3.7m was held in cash, before being transferred to another scheme in July 2014.

Imperial Trustee Services Ltd was placed into provisional liquidation on 5 June. It was trustee of Capita Oak, which received £10.8m from savers.

The Insolvency Service said that the company suffered from governance issues with several directors coming and going in quick succession, as well as from an inability to transfer benefits following requests.

This led to a number of rulings by The Pensions Ombudsman, which has referenced the scheme in relation to so-called pension ‘liberation’.

Both cases are now subject to High Court action and no further information will be made available until the petitions to wind up the companies are heard in Manchester next month.

The provisional liquidator’s role is to protect assets in the possession or under control of the company pending the determination of the petition. The Insolvency Service also said that the provisional liquidator also has the power to investigate the affairs of the companies as necessary to protect assets, including any third party or trust money.

In April this year, pensions ombudsman Tony King published guidance surrounding transfers to Capita Oak, which has been at the centre of questions and complaints over alleged pension liberation.

Mr King told consumers they should stop submitting claims to the ombudsman over transfers to the scheme and should first go through their original pension provider’s internal dispute resolution procedure.

At that time, the ombudsman published two cases where it did not uphold complaints against separate providers for transferring pension funds to Capita Oak on behalf of a single client, emphasising the statutory right to transfer and a shift in ‘best practice’ following guidance issued in February 2013.

An earlier decision saw the ombudsman uphold a complaint against the scheme for failing to comply with a transfer request, but warned the claimant might need to take legal action to recover his six-figure fund.

The consumer had transferred a defined benefit scheme with NHS Scotland equating to around £367,000. He was told that his money be invested into a self-storage firm in the north of England that was offering an 8-12 per cent return. He also received a “non-repayable loan” of £17,500.

ruth.gillbe@ft.com

Additional reporting by Ashley Wassall