Four trustees of a master trust who failed to promptly invest members’ savings for three years, affecting 9,081 members and contributions of £1.4 million, have been fined by The Pensions Regulator (TPR).
The trustees of Salvus Master Trust were fined a total of £5,000 for the problem – the maximum fine which could have been imposed.The case is outlined in a report published by TPR today (PDF, 132kb, 5 pages).
Trustees are required by law to process and invest contributions from employers promptly and accurately. Not doing so breaches Regulation 24 of the Occupational Pension Schemes (Scheme Administration) Regulations 1996. This was TPR’s first penalty issued following such a breach.
Salvus’ trustees reported the problem to TPR, along with a plan to rectify the failure to invest pension contributions and address the historic administration problems which led to the breach.
The master trust worked with TPR to address the problems and make sure all of the affected members were returned to the financial position they would have been in if this error had not occurred.
Nicola Parish, Executive Director of Frontline Regulation at TPR, said: “Pension schemes must collect and invest the contributions made by employers and employees. To have left so much money uninvested for this period of time is clearly unacceptable.
“Our engagement with Salvus has ensured that not only the thousands of members affected have not suffered any detriment, but also the master trust’s systems have been improved to stop this happening again.
“New legislation for master trusts came into force on 1 October which puts safeguards around these schemes to better protect members. Master trusts have to prove that they meet standards in five areas, including proving that they have adequate systems and processes. We will continue to take tough action against schemes which do not meet their legal duties.”
- A fine was imposed on the trustees of the Salvus Master Trust: Gowling WLG Trust Corporation Limited, Able Governance Ltd, Clark Benefit Consulting Ltd and Steve Rumbles.
- Section 89 of the Pensions Act 2004 gives us the power to publish information on cases where we have exercised or considered exercising our powers. We are committed to being open and transparent in our activities, which may include publishing Regulatory Intervention Reports on our considerations in particular cases. Our ability to publish information about our activities plays an important part in enabling us to deliver on our commitment to transparency.
- 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 TPR’s functions under Part 3 of the Pensions Act 2004 only).
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