The Pensions Regulator announced earlier this month (February 2012) that following its investigation into the Hugh Mackay Retirement Benefits Scheme, three former trustees have been prohibited from acting as trustees of trust schemes in general because they were not ‘fit and proper’ persons.
This follows The Pensions Regulator’s Determination panel finding that the trustees’ breaches were so ‘serious and persistent’ as to justify the action taken.
The mistakes made by the trustees took place over a number of years, and related mainly to breaches of their investment duties and obligations and their inability to manage conflicts of interest.
There are two important points to take from this case. The first is the implications of pension schemes being run without regard to relevant legislation and guidance. The Pensions Regulator operates to protect member’s benefits, and where it appears that schemes are not being run correctly, and member’s benefits are at risk, will seek to use its enforcement powers. The second is the seriousness of the trustee’s failure to demonstrate sufficient trustee ‘knowledge and understanding’. The job of a pension scheme trustee has become increasingly complex over recent years, as the number of legislative requirements has grown. Trustees who are new to the role, or who are not in the habit of updating their knowledge regularly should act sooner rather than later to ensure they are up to date. If you would like any further assistance with this topic, please contact Chris Nuttall – email@example.com