Six pension schemes fined for non-compliant chair’s statements

Six pension schemes found to have produced non-compliant chair’s statements have been fined and both the scheme’s trustees and the professional trustees named for the first time by The Pensions Regulator (TPR), as part of its compliance activity

Nicola Parish, TPR’s executive director of frontline regulation, said: ‘What some trustees put together as a chair’s statement is disappointing. These statements are important documents and should demonstrate to scheme members that the trustees are doing a good job and savers’ money is being well looked after.

‘This is not just a tick box exercise. The chair’s statement should make declarations about key aspects of governance, from making sure a scheme’s costs and charges represent good value for money to assessing the skills and knowledge of trustees. A statement with little explanation offers no comfort to pension savers that their money is safe.’

Four of the six pension schemes were fined £2,000 (Ethika Auto Enrolment Pension Scheme, My Workplace Pension Scheme, Vedius Pension Trust, The Nurture Master Trust), with £500 fines for the other two (The United Members Pension Trust and The Dunnes Stores (Bangor) Ltd Management Pension Scheme).

TPR’s quarterly list of compliance and regulation issues also includes details of 38 fines handed to the trustees of 35 schemes and totalling £23,141 for failures to prepare a chair statement. The regulator also took enforcement action for the first time against trustees or scheme managers who failed to get their defined benefit (DB) scheme accounts audited within seven months of the end of the scheme year.

In total, TPR records 28,446 cases of enforcement powers being used in automatic enrolment between October and December 2017.

Cold call ‘scam’

Separately TPR is warning investors and advisers of a potential scam, following an investigation with the police into a number of pension schemes suspected of being linked to cold-calling.

TPR is concerned that pension holders have been phoned and persuaded to transfer their funds into poorly-run schemes with the promise of higher returns and cash incentives upfront.

As part of the same investigation, TPR has also appointed an independent trustee to run the Alderley Wealth Management pension scheme over concerns about the management of more than £3m of funds.

There is evidence that some members requested their funds to be invested in low-risk UK based investments. Instead funds were placed in high-risk and illiquid investments overseas. Payments are suspected to have been made to introducers – some of whom TPR believes had used cold-calling to target pension holders.

Mike Birch, TPR’s director of case management, said: ‘Cold-calling pension holders isn’t illegal yet, but no reputable business does it.

‘We would urge anyone to contact Action Fraud if they are phoned and offered the chance to transfer their pension.

‘Our message is simple – a cold-call about your pension is an attempt to steal your savings.’

TPR guidance on how to produce a chair’s statement is here.

Report by Pat Sweet

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