Danapak Flexibles Retirement Benefits Scheme – Regulatory intervention report

This report outlines the successful actions we took against four targets who benefitted from significant funds extracted from Discovery Flexibles Limited (DFL), the sponsoring employer of the Danapak Flexibles Retirement Benefits Scheme.

This case shows that we will consider using our Contribution Notice power where there has been material detriment to a scheme, even if the employer remains solvent and continues to trade. In this case, the use of our Contribution Notice power was unsuccessfully challenged in the Upper Tribunal by one of the targets of our regulatory action.

This case demonstrates our commitment to protecting the interests of scheme members through using our regulatory powers and by entering into settlement agreements where doing so leads to a good outcome for members.

This report will be useful for employers, particularly directors, and for trustees and advisers of defined benefit schemes.

Published 6 May 2026

Case summary

In this case we used our powers to issue Contribution Notices to two individuals and reached a financial settlement with two others. Our action has ensured that more than £2.5 million will be paid into the Danapak Flexibles Retirement Benefits Scheme.

Contribution Notices require targets to pay a specified amount of money into a defined benefit pension scheme. Here, we sought Contribution Notices against four targets in relation to cash extractions from DFL, to its owner and his family, at a time when the scheme had a significant deficit. After we referred this case to the Determinations Panel, we reached a settlement agreement with two of the individuals just before the Determination Meeting. The case against the other two went ahead and the Determinations Panel determined that Contribution Notices should be issued against them. One of those individuals challenged the decision, and their case was referred to the Upper Tribunal. The Upper Tribunal judgment not only supported our views on how the legislation should be interpreted but also increased the amount of the Contribution Notice payable by the referring party.

Background

This case involved DFL, a packaging supplier to household brands. DFL’s shares were purchased by the Wrigley family in 2008 for £1, using an acquisition company called Fabcorp Limited, which was later renamed Discovery Flexibles Holdings Limited (DFH). DFH was owned by members of the Wrigley family including Chris Wrigley (full name Thomas Christopher Wrigley). Chris Wrigley was a director of DFL until he sold the company for £1 in 2019. His sister, Ann Pelgrave (full name Elizabeth Ann Pelgrave), also served as a director of DFL between January 2010 and March 2016.

DFL was the sponsoring employer of a defined benefit pension scheme called Danapak Flexibles Retirement Benefits Scheme, with 209 members as at 31 March 2024.

After investigating, we concluded that between 2015 and 2019, Chris Wrigley extracted around £3 million from DFL through multiple acts, despite the scheme’s substantial deficit. This money benefitted him and his family, in particular his wife Elizabeth Wrigley (full name Elizabeth Anne Wrigley), his brother Paul Wrigley (full name Robert Paul Wrigley), and his sister Ann Pelgrave. Paul Wrigley and Ann Pelgrave benefitted from the extraction of money in relation to the share sale act.

In addition to being a director of DFL, Chris Wrigley was also a trustee of the scheme until 7 December 2017. From March 2016 the ultimate holding company of DFL was owned solely by Chris Wrigley and his wife Elizabeth Wrigley, and Chris Wrigley was sole director of DFL.

On 3 November 2017, our Determinations Panel issued a Determination Notice prohibiting Chris Wrigley from acting as a trustee of any pension scheme. We concluded that he was not a fit and proper person to act as a trustee, as he had proposed an investment in the employer that breached section 12 of the Occupational Pension Schemes (Investment) Regulations 2005, while he was chair of trustees. At the same time, we appointed an independent trustee, Pi Consulting (Trustee Services) Limited, to take over the running of the scheme.

Even though Chris Wrigley knew the scheme was in deficit, the level of contributions payable to the scheme reduced significantly. By February 2019, the difference between the size of the scheme’s deficit and the level of annual contributions due to be paid to the scheme was so large that the deficit was not expected to be cleared until 2048 – almost 30 years later.

Table 1: scheme deficit figures

Valuation date	Assets (£ million (£m))	Deficit - technical provisions basis £m	Deficit - PPF (section 179 PA04) basis £m	Deficit buy-out (section 75 PA95) basis £m
1 April 2008	16.5	5.3	5.9	19.2
1 April 2011	18.5	3.4	5.5	17.9
1 April 2014	20.6	4.4	8.8	26.4
1 April 2017	24.7	16.2	13.4	26.3
1 April 2020	22.8	19.6	17.0	24.8

Table 2: contributions paid from DFL to the scheme (2008 to 2019)

Date	Amount
1 April 2008 to 31 March 2009	£232,726
1 April 2009 to 31 March 2010	£238,002
1 April 2010 to 31 March 2011	£240,000
1 April 2011 to 31 March 2012	£130,000
1 April 2012 to 31 March 2013	£80,000
1 April 2013 to 31 March 2014	£77,220
1 April 2014 to 31 March 2015	£83,499
1 April 2015 to 31 March 2016	£88,149
1 April 2016 to 31 March 2017	£90,675
1 April 2017 to 31 March 2018	£92,944
1 April 2018 to 31 March 2019	£95,264

These sums did not include any allowance for expenses the scheme paid while Chris Wrigley owned DFL. For example, between September 2015 and February 2019, the scheme paid £899,138 in Pension Protection Fund (PPF) levies and £318,470 in other expenses. This meant the employer contributions during that time were far below what was needed to cover the scheme’s ongoing expenses, let alone be at a level reasonably expected to reduce the deficit.

Regulatory action

The Acts identified causing detriment to the scheme

We identified four acts that we considered led to significant value being extracted from the employer, which were detrimental to the scheme:

Act one - monthly payments from DFL to Chris Wrigley and Elizabeth Wrigley

Between September 2015 and February 2019, Chris Wrigley extracted a monthly payment from DFL for the benefit of himself and Elizabeth Wrigley. These payments, which began at £20,000 and increased to £23,000 in November 2017, were accounted for as dividends and/or management charges.

These extractions started in 2008. However, our case was limited to a statutory lookback period of no further than six years from the date our Warning Notice was issued as per the requirements of section 38(5)(c) of the Pensions Act 2004. As we issued our Warning Notice on 16 September 2021, no extractions that took place before 16 September 2015 were included as part of this act.

In December 2011 service contracts were signed by Chris Wrigley and Ann Pelgrave for the payments to be made from DFL to Pink Printers Limited (Pink, a company owned by the Wrigley family), and then from Pink to Ash 126 Limited (Ash 126, a company owned by Chris Wrigley and Elizabeth Wrigley). Pink was subsequently acquired in March 2016 by Ash 126.

Act two – DFH company shares purchased using money from DFL

In September 2015 Chris Wrigley approached the other shareholders of DFH, which included Paul Wrigley and Ann Pelgrave, with an offer to purchase their shares.

To facilitate the share purchase, Chris Wrigley drew down £800,000 from DFL’s invoice discounting facility, transferred this money to Pink and then used this money to pay Paul Wrigley and Ann Pelgrave for their shares in DFH. A new company owned by Chris Wrigley and Elizabeth Wrigley called Ash 160 Limited, later renamed Discovery Flexibles Group Limited (DFG), purchased the DFH shares. DFG became the ultimate parent company of DFL. Between September 2015 and March 2016 Ann Pelgrave and Paul Wrigley, were both made aware of the financial position and performance of DFL as well as the significant deficit in the scheme. In particular, a valuation of the shares was prepared by Ashgates Corporate Services Limited (Ashgates, accountants for the group) and provided to the shareholders. The valuation made it clear there was a significant deficit in the scheme, which had resulted in a large range of potential valuations for the shares (from as low as £1 up to a maximum of £1.2 million). Despite this, the targets agreed a sales price that Ashgates stated was right at the “top end of the valuation” and one they could not put their assurances behind. The DFH share sale was agreed on 18 March 2016 and subsequently Paul Wrigley and Ann Pelgrave both received a sum of £360,437 for their DFH shares. The £800,000 loan owed by Pink to DFL was transferred to DFG (a holding company with no resources to repay the debt). This loan was never repaid to DFL and has since been written off.

Act three – Pink’s assets stripped leaving company worthless before sale

Ash 126 acquired Pink for £474,949 as part of the transaction described in Act 2. Chris Wrigley then directed Pink to transfer all its assets to Ash 126 via dividends and gifts before selling Pink to DFL for £477,344. This meant that by the time of this sale Pink was effectively worthless.

Act four – DFL provides financial support to other companies despite known scheme deficit

Even though DFL was in a poor financial position and there was a known deficit in the scheme, DFL, under the directorship of Chris Wrigley and Ann Pelgrave, continued to provide support to other companies owned by Chris Wrigley. One of these companies was A F Reprographics Limited (AFR), where Ann Pelgrave was also a director. DFL regularly loaned money to AFR, but not all of it was paid back. Eventually, £224,481 had to be written off as a loss.

Warning Notice

On 16 September 2021 we issued a Warning Notice to all four targets seeking four Contribution Notices. The Contribution Notices sought against Elizabeth Wrigley, Paul Wrigley and Ann Pelgrave were sought on a joint and several basis with Chris Wrigley, who we maintained was the primary architect behind the acts.

Our case was that the value extracted from DFL by Chris Wrigley between September 2015 and February 2019, through the four acts, individually and as a series, had a detrimental impact on the scheme in a material way, as this affected DFL’s ability to support the scheme. In our view, the acts made it much less likely that members would receive the benefits they had built up, and met the requirements of the Material Detriment Test as set out in section 38A of the Pensions Act 2004.

The targets sought to challenge the case set out against them in our Warning Notice.

Chris Wrigley and Elizabeth Wrigley jointly challenged the case, arguing that the acts, either on their own or as a series, were not materially detrimental to the scheme. Instead, they claimed that they were reasonable transactions in the ordinary course of business.

Paul Wrigley and Ann Pelgrave each raised a number of arguments. These included that they were simply recipients of the funds from a share sale orchestrated by Chris Wrigley. Also, that the material detriment resulted from the failure to repay the loan, in respect of which they said they had no involvement. Ann Pelgrave also argued that although she was listed as a director of DFL, her role was merely a “paper only” director who had no knowledge or influence in company matters.

We did not consider that any of the representations made by the targets changed our case against them. As a result, the case was referred to the Determinations Panel on 27 April 2023.

On 30 October 2023, three days before the Determination Meeting was due to take place, we agreed a settlement with Chris Wrigley and Elizabeth Wrigley. As part of the agreement, they will pay a total of £2 million into the scheme. £1.1 million was paid across October and November 2023, while £180,000 was paid in October 2024 and again in October 2025. The remaining £540,000 is due to be paid in three more annual instalments of £180,000. The final payment is due by 30 October 2028.

The Determinations Panel

The Determination Meeting took place on 2 and 3 November 2023. Due to the settlement agreed with Chris Wrigley and Elizabeth Wrigley, the scope of the meeting was narrowed to focus only on the parts of our case relating to Paul Wrigley and Ann Pelgrave, specifically the second act.

On 26 January 2024, the Determinations Panel issued a Determination Notice. The Determinations Panel determined that both Paul Wrigley and Ann Pelgrave should each be issued with a Contribution Notice for the principal sum of £180,218.50 plus interest. It was determined that the interest should be paid from the date they received the proceeds from selling their shares in DFH. The Determinations Panel considered it was reasonable for Paul Wrigley and Ann Pelgrave to contribute 50% of the £360,437 they each received to the scheme. The Determinations Panel considered that this amount reflected what was reasonable in all the circumstances and taking account of a number of factors, including the conduct of Paul Wrigley and Ann Pelgrave in involving themselves as they did with the ‘DFH Share Sale Act’ and what they could have expected to have paid on a joint and several basis with Chris Wrigley.

Shortly after the Determination Panel’s decision Paul Wrigley paid a total of £222,482, which included an interest adjustment, to meet the liability set out in the Contribution Notice issued to him.

The Upper Tribunal

Ann Pelgrave referred the decision to issue a Contribution Notice against her to the Upper Tribunal. She argued that the legal requirements under section 38 of the Pensions Act 2004, in particular the Act Test (material detriment), Party Test and the Reasonableness Test had not been met. She claimed that being a mere beneficiary of the proceeds from the DFH share sale did not make her a party to the detrimental act of value extraction. She also argued that the £800,000 drawdown transferred from DFL to Pink was not materially detrimental to the scheme, as the loan could have been repaid, so the funds remained recoverable to DFL. Additionally, she argued that although she was a director of DFL, she was not involved in company decisions and was a “paper only" director.

We argued that the Upper Tribunal should reach a decision that a Contribution Notice be issued against Ann Pelgrave for the principal sum of £360,437, plus an additional uplift to take into account the passage of time. The total amount we sought at the Upper Tribunal was actually greater than the amount of the Contribution Notice issued by the Determinations Panel. We sought the higher amount because we believed we were not restricted by the Determination Panel’s determination as long as the amount sought was not greater than either the sum originally sought in the Warning Notice or the ‘shortfall sum’ (as defined in section 39 of the Pensions Act 2004).

Following a two-day hearing held on 30 April 2025 and 1 May 2025 the Upper Tribunal decided that a Contribution Notice should be issued to Ann Pelgrave for a principal sum of £245,749 plus daily interest.

The Upper Tribunal rejected Ann Pelgrave’s argument that because she was the mere recipient of proceeds from the share sale, she was not a party to the act. The Upper Tribunal found that as a director of DFL it was her responsibility to act in the company’s best interests and to protect the interests of all stakeholders, including the scheme, especially given her knowledge of DFL’s financial position and the scheme’s deficit. The Upper Tribunal did not accept her argument that as a “paper only” director she had no influence over events, finding that “she singularly failed to discharge her duties as a director” and that as a director “she should not have allowed the employer company to weaken its resources in the way it did without making sure that the interests of all stakeholders in the company were protected. She did not ask any questions or take any advice with a view to even begin to discharge that responsibility.” The Upper Tribunal found that such conduct was unreasonable.

The Upper Tribunal also found that Ann Pelgrave was party to the act due to her knowledge that the scheme had a significant deficit and that the share sale would be funded by DFL drawing down on its invoice discounting facility. The Upper Tribunal considered the meaning of ‘party to’, ultimately deciding that it should have its ordinary meaning of ‘a person who is concerned in an action or affair; a participant; an accessory’.

In relation to Ann Pelgrave’s argument that the loan was not materially detrimental to the scheme because it was repayable, the Upper Tribunal concluded that given DFL’s uncertain financial position at the time, increasing its debt by £800,000 and paying that money without acquiring any real new source to fund the repayment did materially impact the likelihood of the scheme meeting its obligations to members. The Upper Tribunal also found that this share sale had a material negative impact on the scheme because it greatly increased the risk of DFL not repaying the PPF levies and expenses or meeting its commitments to pay deficit repair contributions to the scheme.

The Upper Tribunal also concluded that the Determinations Panel’s decision to use a shift from joint and several liability to sole liability (due to the earlier settlement) as a framework for determining what was a reasonable sum, did not justify reducing the amount of the Contribution Notice. The Upper Tribunal noted that there would have been no guarantee that Ann Pelgrave would have been able to recover 50% of the liability from Chris Wrigley. It therefore found that the amount of the Contribution Notice should be the value of the benefits she received. Due to the circumstances of this case, the Upper Tribunal reduced the Contribution Notice to the value of the benefits retained by Ann Pelgrave.

The Upper Tribunal decided that a Contribution Notice should be issued to Ann Pelgrave for a principal sum of £245,749 plus daily interest from the date of the share sale (18 March 2016), calculated at the Bank of England base rate plus 2%.

Ann Pelgrave paid a total of £333,015, which included an interest adjustment, to meet the liability set out in the Contribution Notice issued to her.

Outcome

As a result of our regulatory intervention, over £2.5 million will be recovered and returned to the scheme.

Timeline of events

16 February 1998 - Chris Wrigley appointed director of Pink.

28 February 2008 - Fabcorp Limited (DFH) incorporated with Chris Wrigley and Ann Pelgrave’s husband (at the time) as subscribers.

23 May 2008 - Wrigley family purchase DFL and Chris Wrigley is appointed director.

14 July 2008 - Chris Wrigley becomes a trustee of the scheme.

22 January 2010 - Ann Pelgrave appointed director of DFL, DFH and Pink.

17 May 2011 - Chris Wrigley becomes director of Ash 126 and Elizabeth Wrigley becomes company secretary.

23 December 2011 - Contracts for services signed by Ann Pelgrave and Chris Wrigley: DFL and Pink, £23,000 to be paid by DFL to Pink and Pink and Ash 126, £20,000 to be paid by Pink to Ash 126.

20 November 2012 - Chris Wrigley and Ann Pelgrave appointed as directors of A F Reprographics.

11 December 2012 - Chris Wrigley resigns as director of A F Reprographics.

14 September 2015 – Chris Wrigley wants to buy DFH shares from brother Paul Wrigley, sister Ann Pelgrave and his parents.

18 September 2015 - Drawdown of £800,000 from RBS.

28 September 2015 - Decision by Chris Wrigley not to inform TPR regarding the £800,000 drawdown.

24 December 2015 - DFG incorporated. Chris Wrigley and Elizabeth Wrigley both appointed as directors.

16 March 2016 - Ann Pelgrave resigns as director of DFH.

18 March 2016 - The date on which Ann Pelgrave and Paul Wrigley sold their DFH shares.

23 March 2016 - Ann Pelgrave resigns as director of DFL.

1 April 2016 - Paul Wrigley and Ann Pelgrave receive £360,000 each for their DFH shares.

4 April 2016 - Ash 126 acquires shares in Pink for £474,949.

19 October 2017 - DFL acquires entire shareholding in Pink for £477,344.

7 December 2017 - TPR prohibits Chris Wrigley from acting as a trustee and appoints Pi Consulting (now Pi Partnership) to the scheme.

31 December 2018 - DFL writes off £224,481 debt owed by A F Reprographics.

15 February 2019 - DFG is sold to Pack34 Limited for £1. Chris Wrigley resigns as director from DFL and all other group companies. Elizabeth Wrigley resigns as director of DFG.

15 December 2019 - TPR opens its investigation.

16 September 2021 - TPR issues a Warning Notice against the individuals.

19 to 21 April 2022 - The individuals submit representations to the Warning Notice.

12 October 2022 - Chris Wrigley and Elizabeth Wrigley submit further joint representations.

27 April 2023 - TPR refers the case to the Determinations Panel.

30 October 2023 - TPR settles case with Chris Wrigley and Elizabeth Wrigley.

2 to 3 November 2023 - Determination meeting heard in relation to Paul Wrigley and Ann Pelgrave.

31 December 2023 - DFL write off the £800,000 debt owed by DFG.

26 January 2024 - Determination Notice issued to Paul Wrigley and Ann Pelgrave which determined Contribution Notices to be issued to both targets for £217,353 each plus daily interest.

23 February 2024 - Ann Pelgrave referred the Determination Panel’s decision to the Upper Tribunal.

28 February 2024 - Contribution Notice issued to Paul Wrigley.

7 March 2024 - Paul Wrigley pays a contribution to the scheme of £222,482.

30 April to 1 May 2025 - Upper Tribunal hearing – TPR versus Elizabeth Ann Pelgrave.

1 August 2025 - Upper Tribunal decides that a Contribution Notice should be issued to Ann Pelgrave for £245,749 plus daily interest at Bank of England base rate plus 2%.

1 September 2025 - Contribution Notice issued to Ann Pelgrave.

4 to 24 September 2025 - Ann Pelgrave pays a contribution to the scheme of £333,015.