A pension company acting as sponsoring employer for 15 retirement schemes has been closed down in the High Court alongside five other firms associated with it.
Fast Pensions and the trustee of the schemes, FP Scheme Trustees, were wound up in the public interest yesterday (30 May) after they were found to have “been used to abuse millions of pounds of people’s savings”, according to the Insolvency Service.
The remaining four companies are entities into which some of the pension scheme funds invested, including Blu Debt Management, Blu Financial Services, Blu Personal Finance, and Umbrella Loans.
The Insolvency Service found between 2012 and 2013 520 people were encouraged to transfer their pension savings from existing providers into one of 15 schemes, with Fast Pensions acting as the sponsoring employer.
Investigations found a total of at least £21m was invested into the schemes through tactics such as cold-calling.
The exact value could not be determined because the companies failed to produce adequate accounting records and did not cooperate fully with the investigation, the service said.
David Hope, chief investigator, said: “People work long and hard to put money away for their retirements but the six companies that have been shut down paid scant regard to their members. They used unsavoury tactics to attract members and failed to paint the full picture as to what would really happen with their savings.
“By shutting the companies down, the courts have put a stop to their unscrupulous activities and we hope this sends a strong message that we will robustly investigate and take action where people’s funds and savings are at risk.”
The six entities had been put into provisional liquidation in March after the Insolvency Service was made aware of complaints about the management and operation of the companies.
The service’s investigations found people who were originally looking for credit were advised by the companies they could get a loan if they transferred their pension savings to one of Fast Pensions’ schemes.
It said the advice provided was inadequate as the companies had “misrepresented” the schemes on offer.
It found advisers had failed to disclose information around returns and the high risk and illiquid nature of the investments made by the schemes, as well as the benefits members would be entitled to.
It said at least £4m was used to pay commissions and the remaining funds were largely used to make loans to companies and other entities which appeared to be connected with Fast Pensions and the trustees.
The Official Receiver in the public interest unit (North) was made liquidator of the companies.
It has made an application to The Pensions Regulator for the appointment of an independent trustee to take over the running of the pension schemes, which should be completed within six weeks.
Until then it will be in charge of protecting the investments and assets in the pension schemes but will not make any investment decisions or authorise any payments or transfers out.