Article by Jane Matthews, Pension Expert Website
On the go: The Pensions Regulator is to prosecute two trustees and an adviser for their alleged role in making loans from a pension scheme.
Stephen Smith, 63, of Broughton-in-Furness in Cumbria, and David Boardman, 68, of Preston, who were the trustees of the Worthington Employee Pension Top Up Scheme, are accused of making five prohibited loans from the scheme and one prohibited investment.
Derek Thomas, 85, of West Oxfordshire, a professional adviser to the scheme, is accused of assisting or encouraging four prohibited loans.
The allegations are in relation to loans and an investment totalling £700,000 in value.
These included three loans by the scheme to Stonewell Property Company, which was the parent company of the scheme’s sponsoring employer, Marcus Worthington and Company.
Under the 1995 Pensions Act and the 2005 Occupational Pension Schemes Regulations, certain employer-related investments made by an occupational pension schemes are prohibited. This includes loans to a person connected or associated with the scheme employer.
The scheme 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.
Under the law, investments of more than 5 per cent of the scheme value in land used by, or subject to, a lease in favour of a person connected or associated with the scheme employer are prohibited.
A breach of these laws can potentially lead to an unlimited fine and imprisonment.