The firm had the investments reviewed by an independent adviser, given its “concerns about the purported investments”, according to a note seen by FTAdviser, which was sent to members of the scheme on 10 December.
It said that the advice trustees have received is that they are not suitable for a scheme such as this and alternative investments should be sought where it was prudent for the trustees to do so.
Additionally, the note said that the scheme has been set up in such a way that every member has a ‘personal account’ to which specific investments are allocated.
“When we looked at this together with the investments, we found that this was a very unusual set up for an occupational pension scheme,” read the document.
“Having taken advice, Dalriada considers that this will create problems for the administration of the scheme, because it is unclear how the scheme’s costs should be allocated. Furthermore, the illiquid nature of the investments will cause problems when the scheme is required to provide pension benefits, death benefits, transfers or cash lump sums.”
In June this year, pension liberation fears drove The Pension Regulator to appoint Dalriada Trustees as an independent trustee to the London Quantum Retirement Benefit Scheme.
At that time, Dalriada wrote that it was not appropriate for it to comment in relation to the decision to appoint an independent trustee, however “there are concerns that the scheme has been used as a vehicle for ‘pension liberation’.”
Last week, an oral hearing was held in front of TPR’s determinations panel to determine whether Dalriada Trustees’ appointment should be upheld, but details of the outcome have not yet been published.
The trustee of the scheme prior to Dalriada’s appointment was Dorrixo Alliance UK.
Dalriada said in its note to members that to date, various parties including Dalriada, Dorrixo, Quantum Investment Management Solutions (the employer of the scheme) and TPR have made written submissions to the panel regarding whether the appointment should be upheld.
Mike Crowe, trustee representative at Dalriada Trustees said: “Having received this independent advice we are carefully considering what steps we should take to ensure the best outcome for the members.”
David Trenner, technical director at Intelligent Pensions confirmed that Dalriada are professional trustees and were appointed by TPR to act as trustees of London Quantum.
“The investments are typical of schemes like Ark, which invest in unregulated investments. UK advisers are no longer permitted by the FCA to sell unregulated collective investment schemes to anyone other than an experienced professional investor.”