Although Realsave had no annual returns or accounts, had received no existing investments, had lent no money, and had no contracts in place with banks, Kench’s brother told the ombudsman’s hearing that he and Kench had viewed the investment as a “game-changing opportunity to make a great deal of lolly”.
The scheme grew to have seven members, with benefits amounting to £615,000. Half of this was invested in Realsave, and 30 per cent went to Pension Assist by way of commission, though members were never informed of these details.
Stone then stopped speaking to the Kenches and was subsequently arrested, and told to repay £1,141,680 within three months or face a further seven years in prison. Instead of going to members, the money was used to meet the confiscation order issued against Stone.
The Grosvenor schemes were dissolved in 2018, but again, members were not informed.
This case followed issues with the Norton Motorcycles pension schemes and the prosecution of owner Stuart Garner, who was accused of transferring the assets of three pension schemes — Donnington 2012, Commando 2012 and Donnington MC, which had 227 members between them — into his Norton business.
The case lasted seven years and caused the Pensions Regulator to conduct an internal review of its approach and response.
Garner arranged for the schemes to be administered by T12 Administration, which subsequently folded after the imprisonment of two of its directors. It was replaced with LD Administration, the owner of which, Margaret Liddell, admitted to the ombudsman that she and her staff had no training or experience administering occupational pension schemes.
Dalriada was appointed as an independent trustee and took the view that, because of Norton’s precarious financial position, supporting the company presented the most realistic chance of the schemes recovering their investments.
Norton went into administration in 2020, leaving members unsure whether they would get back any of the £14m owed to them.
Benjamin Mercer is a senior reporter at FTAdviser's sister publication Pensions Expert