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Former trustees face crown court over illegal pension loan and investment offences

Ref: PN22-30

Issued: Thursday 20 October 2022

Two former pension trustees are set to appear at Preston Crown Court over allegations of making illegal loans and investments in a prosecution brought by The Pensions Regulator (TPR).

Stephen Smith, 63, of Broughton-in-Furness, Cumbria and David Boardman, 68, of Preston, Lancashire who were trustees of the Worthington Employee Pension Top Up Scheme, appeared at Preston Magistrates’ Court yesterday (Wednesday 19 October) accused of making five prohibited loans from the scheme and one prohibited investment.

Mr Smith pleaded guilty to making five prohibited loans but pleaded not guilty to a sixth charge of making a prohibited investment while Mr Boardman did not enter a plea.

Both men were released on bail and ordered to appear at Preston Crown Court for a plea and trial preparation hearing on 22 November.

Derek Thomas, 85, of West Oxfordshire, who worked as a professional adviser to the scheme had also been charged with four counts of assisting or encouraging prohibited loans.

Mr Thomas, who did not appear in court or enter a plea, was ordered to attend Preston Magistrates’ Court on 26 October.

The allegations concern loans and an investment reaching a value of £700,000. These included three loans by the scheme to Stonewell Property Company Limited, which was the parent company of the sponsoring employer, Marcus Worthington and Company Ltd.

The scheme also made an investment in a retail park where the land concerned had been let on a long lease to companies connected and associated with Marcus Worthington and Company Ltd.

Notes for editors

  • Certain employer-related investments made by an occupational pension scheme are prohibited by Section 40 of the Pensions Act 1995 and the Occupational Pension Schemes (Investment) Regulations 2005. Loans to a person connected or associated with the scheme employer are prohibited. Investments of more than 5% of the value of scheme resources in land occupied or used by, or subject to a lease in favour of, a person connected or associated with the scheme employer are also prohibited. Breach of Section 40 is a criminal offence and can potentially lead to an unlimited fine and/or imprisonment.
  • TPR is the regulator of work-based pension schemes in the UK. Our statutory objectives are:
    • to protect members’ benefits
    • to reduce the risk of calls on the Pension Protection Fund
    • to promote, and to improve understanding of, the good administration of work-based pension schemes
    • to maximise employer compliance with automatic enrolment duties; and to minimise any adverse impact on the sustainable growth of an employer (in relation to the exercise of the regulator’s functions under Part 3 of the Pensions Act 2004 only)

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