Pensions Regulator  

Trustee appointments surge amid scam threats

Trustee appointments surge amid scam threats

The Pensions Regulator has appointed independent trustees to 36 cases during 2018/19 as it sought to protect the members from potential scams.

TPR can appoint trustees for a number of reasons but a Freedom of Information request submitted by FTAdviser showed the number appointed to protect members was higher in that year than in any of the previous four years.

In all of the 36 cases TPR deemed the scheme needed a trustee with the necessary knowledge and skill, that it had to secure the proper use of the pension fund assets and that the members of the scheme needed protecting.

The regulator has already made four similar appointments this year (2019/20).

TPR can also appoint an independent trustee to ensure that the number of professionals on the scheme’s board are sufficient for proper administration, which happened in 204 cases in the last financial year, also a record.

 

Total Powers

19/20

18/19

17/18

16/17

15/16

14/15

Trustee appointments

819

53

226

133

153

160

94

Secure sufficient number of trustees (N. Ireland)

20

2

4

4

4

5

1

Secure sufficient number of trustees

747

48

204

125

141

153

76

Necessary knowledge, secure assets, protect members

51

4

36

1

9

1

0

Secure assets, protect members

1

0

0

0

0

1

0

FTAdviser reported on Monday (July 22) that the watchdog is carrying out seven criminal investigations into potential pension scams.

In a letter sent to the Work and Pensions select committee on July 12, Charles Counsell, TPR’s chief executive, said the cases covered 52 schemes and there were 38 suspects who the watchdog was treating as targets.

Indicative losses to savers' pensions could amount to as much as £55m, he added.

In the letter, Mr Counsell said scheme members were usually informed of TPR's involvement.

He said: "The independent trustee will write to members upon their appointment and, if they suspect a scam, they will inform members."

According to data published by the FCA in January, victims of pension scams lost an average of £91,000 each to fraudsters in 2017.

David Brooks, technical director at employee benefits consultancy Broadstone, said the appointments could be interpreted in two ways.

He said: "It is good news that the regulator is getting to grips with the scamming issue and taking control to recover losses that people may have experienced or where they were at risk.

"However, given how stretched the regulator is across its functions there is also a fear that they are barely scratching the surface of the scams that are going on."

He argued that despite the watchdog’s intervention increasing dramatically over the past 12 months, it was impossible to know "for many years, or possibly ever, the true extent of the pension scams" since pension tax simplification was announced in 2006.

He added: "This fertile ground has been left to run wild over 12 years and only now does the regulator begin to address it by replacing those responsible. I hope for the best, but fear the worst."

Sean Browes, a professional trustee at Dalriada Trustees, said: "We believe that cases in this context refer to individual schemes; appointments can cover a varying number of schemes, which can skew the figures.

"In addition to appointing professional trustees to curtail a particular scam, we have also seen an increase in instances where TPR seeks to exercise other powers, including instigating criminal proceedings.