Regulator cracks down on pension scheme governance failures
14 Jan 2021
The Pensions Regulator (TPR) has banned a corporate trustee and one of its directors from acting as pension scheme trustees after multiple governance failures which it said highlighted a lack of competence, capability and integrity
14 Jan 2021
The problems included failure to resolve issues with the scheme’s HMRC registration, and failure to comply with requirements to take professional advice, carry out transfer requests, make lump sum payments or ensure effective oversight of scheme investments.
The failings occurred at Audax Pension Trust, a defined contribution occupational scheme which had 38 deferred members, as of its last known membership, and assets valued at some £1.2m.
Following its establishment and savers having transferred into Audax, HMRC contacted the trustee saying they did not regard its administrator, Masons Pensions Administrator, as ‘fit and proper’ and would deregister Audax if the trustee did not resolve the matter.
TPR investigated whether the trustee was addressing the risk of deregistration by either appointing a new administrator or transferring members and assets to another registered scheme.
Despite being given time to address the problem, the trustee failed to carry out either option.
Eight Audax members also complained to TPR about the trustee. Complaints included that the trustee had declined transfer requests with inaccurate and inadequate explanations.
A warning notice issued by TPR also set out other serious problems with Audax’s structure and governance, particularly that Audax no longer had an employer, administrator or investment advisor and no scheme bank accounts. No responsibility was taken by the trustee to resolve these issues to the benefit of the scheme’s members.
As a result, TPR’s determination panel has appointed Dalriada Trustees as an independent trustee to Audax.
Erica Carroll, director of enforcement at TPR, said: ‘In this case, the corporate trustee and director showed a severe lack of knowledge and understanding.
‘This case shows we will ensure those trustees that fail to meet the statutory requirements and the high standards we expect in respect of scheme governance are stopped from failing other savers by continuing to be able to act as pension trustees.’