A judge has ruled that nine schemes linked to police raids carried out earlier this year in relation to pension ‘liberation’ allegations meet the statutory definition of occupational pension schemes, which means The Pensions Regulator has power to investigate and appoint independent trustees.
In July, the High Court was asked to clarify the legal status of a number of schemes linked to high profile police raids carried out in May targeting suspected ‘pension liberation’ schemes.
In the wake of the raids, The Pensions Regulator appointed Dalriada Trustees Ltd as independent trustee to assume responsibility for the day-to-day management of a number of pension schemes that were alleged to be involved in pension unlocking activities.
The regulator, alongside Dalraida, subsequently launched a series of legal actions relating to the activities of the schemes, including one in relation to £18m worth of apparently unauthorised loans that were to be made to recently-transferred scheme members.
Today’s (21 October) ruling was followed a hearing on the “critical question” of whether the nine schemes in question should be treated as occupational pensions in order to assist trustees in determining how those schemes should be administered as well as to assess whether the appointments as trustees by the Pensions Regulator were valid.
Dalraida Trustees and Pi Consulting Trustee Services Ltd were appointed by the court to present arguments in favour of the schemes being occupational pension schemes. The Pensions Regulator was ordered to give the opposing argument.
The schemes under scrutiny in these proceedings are believed to have some 450 members with original transferred funds amounting to a sum in excess of £15m. Pending the progress of police enquiries no further contributions or transfers-in are being accepted and no payments are being made to members of the schemes.
The schemes involved are: Ironstream; Chappell Crest Retirement Benefits Scheme; Herman and Peters Retirement Scheme; Gary Peak Retirement Benefits Scheme; Talton Management Ltd Pension Trust; Strator Services Ltd Pension Trust; Rotinar Ltd. Pensions Trust and Fairdon Services Ltd Pension Trust.
Parties involved in the case say that the decision to treat the schemes as occupational pension schemes is significant as it clarifies the powers The Pensions Regulator can use in relation to such schemes.
Katharine Davies, a partner at Pinsent Masons, which put together the legal case on behalf of Dalriada, said: “These proceedings have been of huge interest to trustees and the wider pensions industry, and the decision helpfully clarifies this important issue.
“While clearly not condoning pension liberation, the Court has clearly recognised that the schemes involved are occupational, which by implication affirms the Pensions Regulator’s capacity to appoint independent trustees to oversee dubious schemes.
“It is surprising that it has taken some time for this definition (from the Pension Schemes Act 1993) to be tested in this way.”