A corporate professional trustee has been fined £103,750 by The Pensions Regulator for multiple failings on the McDonalds Franchisee Pension Scheme.
The master trust scheme provided pensions for 32 franchisees of the fast food chain but is independent of McDonalds.
Link Pension Trustees was fined £73,750 by TPR’s independent determinations panel for failing to obtain audited accounts for the scheme for four years; failing to provide members with statutory money purchase illustrations for two years; and failing to report those six breaches of law to the regulator.
In its ruling, the determinations panel stated that it would have "expected better of a corporate professional trustee".
In separate action arising from the same investigation, Link Pension Trustees was fined £30,000 by TPR for failing to have at least three trustees on a master trust board.
According to the watchdog these breaches were identified through its engagement with all master trust schemes in their bid to be authorised.
Under the new registration process, master trusts have to hold enough capital to cover the cost of a worst-case scenario, such as the cost of transferring to another scheme or of winding up, without charging members.
The government and the regulator have been discussing these new rules since 2016 and were expecting them to drive consolidation in the market.
According to Nicola Parish, TPR’s executive director of frontline regulation, this case highlights how "working more closely with master trusts as part of authorisation and supervision will expose any areas where the law is being broken and enable TPR to take action".
She added: "The good governance of pension schemes is closely linked to good outcomes for members, so running a scheme well is essential to ensure pension savers receive the retirement they deserve. We will take action if the long-term protection of savings is put at risk."
The trustee has resolved the breaches, paid the penalty and the scheme has triggered its exit from the master trust market, TPR stated.
maria.espadinha@ft.com
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