DETERMINATION NOTICE under section 96(2)(d) of the Pensions Act 2004 ( the Act )

Transcription

1 DETERMINATION NOTICE under section 96(2)(d) of the Pensions Act 2004 ( the Act ) The Pensions Regulator case ref: 1524/06 Greyfriars Filters Pension Scheme (the scheme) 1. The Determinations Panel, on behalf of the Pensions Regulator, met on 11 July 2007 to decide whether to exercise a reserved regulatory function in relation to the issues in the Warning Notice dated 2 April The Pensions Regulator considered under section 10(2) of the Pensions Act 2004 that the exercise of a reserved regulatory function was appropriate. 2. The function the Panel was asked to exercise was the application made by the Regulator, for the appointment of an independent trustee to this scheme under section 7(3)(a)(b) or (c) of the Pensions Act 1995, as detailed below: (a) to secure that the trustees as a whole have, or exercise, the necessary knowledge and skill for the proper administration of the scheme; (b) to secure that the number of trustees is sufficient for the proper administration of the scheme; (c) to secure the proper use or application of the assets of the scheme. It was further requested that the trustee s fees and expenses should be paid out of the resources of the scheme. One member of the scheme had sent in a personal application to the Regulator for her appointment as trustee to help her secure the release of her pension benefits only, pursuant to section 7(5A) of the Pensions Act 1995 as amended by the Pensions Act This application was considered under section 7(3)(a) and/or (c) of the Pensions Act The Warning Notice specified the following parties as being directly affected by the regulatory action outlined in the Warning Notice: (a) Christine Lewis scheme member and applicant; (b) Trevor Woodcock scheme member. In addition the following were indirectly interested parties to be informed of the outcome of the determination:

2 (a) B P Sanders & Co Limited scheme administrators; (b) Jane Sewell director of former Luton Realisations Limited, former principal employer and corporate trustee (now dissolved); (c) Pensions Ombudsman. A copy of the Warning Notice had been sent to the above parties. The Panel, having made their decision, considered that the newly appointed independent trustee, Aspen Trustees Ltd, should now be treated as a directly affected party. 4. The Panel granted the application for an order to be issued appointing an independent trustee to the scheme under section 7(3)(a) and 7(3)(c) of the Act under the following terms: Aspen Trustees Limited of Northumberland House, High Holborn, London WC1V 7JZ is hereby appointed as trustee of the Greyfriars Filters Pension Scheme with effect on and from 11 July 2007; The order is made because the Pensions Regulator is satisfied that it is necessary to do so in order to secure that the trustees as a whole have, or exercise, the necessary knowledge and skill for the proper administration of the scheme pursuant to section 7(3)(a) of the Pensions Act 1995 and in order to secure the proper use or application of the assets of the scheme pursuant to section 7(3)(c) of the Pensions Act 1995; The Panel agreed that a sole trustee was appropriate under section 7(5)(a) of the Pensions Act 1995; The powers and duties exercisable by Aspen Trustees Limited shall be to the exclusion of all other trustees of the scheme pursuant to section 8(4)(b) of the Pensions Act 1995; The appointed trustee s fees and expenses shall be wholly paid out of the scheme s resources pursuant to section 8(1)(b) of the Pensions Act 1995 as amended by section 35 of the Pensions Act The order: (a) will take immediate effect on the date of the order; and (b) may be terminated at the expiration of 28 days notice from the Pensions Regulator to the trustees, pursuant to section 7(5)(c) of the Pensions Act The Panel did not grant the personal application by the one member of the scheme for her appointment as trustee pursuant to section 7(5A) of the Pensions Act 1995 as amended by the Pensions Act 2004.

3 5. In making the determination the Panel took into account the evidence and submissions included in the Warning Notice. There were no other submissions or evidence placed before the Panel. There was no evidence in dispute by the parties. 6. This is a paid up defined contribution scheme established on 1 January 1986 by a Declaration of Trust dated 20 December The scheme is currently governed by this Declaration of Trust together with a set of Rules adopted by the principal employer and trustees of the scheme by a Deed of Variation dated 4 February Clause 1 of a Deed of Variation and appointment dated 10 March 1997 granted the power to appoint and/or remove a new trustee to the Principal Employer. Filtrel Limited succeeded Greyfriars Filters Limited as principal employer and sole corporate trustee on 19 March On 19 July 2004 Filtrel Limited changed its name to Luton Realisation Limited. The company was dissolved on 13 June The Regulator became aware that authorisation appeared to have been given to National Westminster Bank to close the trustee bank account held at its Birmingham City Branch. The closing balance of 1, was forwarded to B P Sanders & Co Limited who were the scheme administrators at the time. 9. The Regulator received a formal application from one of the scheme members on 30 October 2006 requesting her appointment as a trustee of the scheme. 10. The Pensions Ombudsman has an ongoing complaint and is investigating on behalf of one of the members of the scheme concerns over the delay in settling his benefits and the missing money. 11. Equitable Life Assurance Society had confirmed to the Regulator that there were ten members remaining in the scheme and that the approximate combined transfer value was 174,427 exclusive of the 1, sent to B P Sanders & Co Limited. 12. The Regulator had written twice to B P Sanders & Co Limited in 2006 to obtain further details but no reply had been received. The money continues to remain unaccounted for. 13. The statutory provisions set out in the Warning Notice were considered by the Panel. In making their decision the Panel also had regard to the objectives of the Regulator as set out in section 5 of the Pensions Act 2004 and to the matters mentioned in Section 100, as set out in Appendix The reasons given by the Panel for their decision were as follows:

4 (a) An independent trustee is needed to resolve various outstanding issues in relation to this scheme; (b) Having an independent trustee would remove any conflicts of interests that may arise and would assist in securing the proper use or application of the assets of the scheme; (c) An independent trustee would be able to deal with the winding up of the scheme expeditiously; (d) It was considered that a member trustee may not have the necessary experience to deal with the above matters; (e) If the member had been appointed it would have caused a conflict of interest in relation to how benefits were apportioned; (f) The power of appointment of a new trustee vested in the principal employer and therefore could not be exercised in relation to this scheme following the dissolution of Luton Realisations Limited. 15. Appendix 2 to this Determination Notice contains important information about the rights of appeal of the parties against this decision. Signed: Chairman: Dated: Dianne Hayter. Dianne Hayter. 13 July

5 Appendix 1 Section 5 of the Pensions Act 2004 Regulator s objectives (1) The main objectives of the Regulator in exercising its functions are (a) to protect the benefits under occupational pension schemes of, or in respect of, members of such schemes, (b) to protect the benefits under personal pension schemes of, or in respect of, members of such schemes within subsection (2), (c) to reduce the risk of situations arising which may lead to compensation being payable from the Pension Protection Fund (see Part 2), and (d) to promote, and to improve understanding of, the good administration of work-based pension schemes. (2) For the purposes of subsection (1)(b) the members of personal pension schemes within this subsection are- (a) the members who are employees in respect of whom direct payment arrangements exist, and (b) where the scheme is a stakeholder pension scheme, any other members. (3) In this section- stakeholder pension scheme means a personal pension scheme, which is or has been registered under section 2 of the Welfare Reform and Pensions Act 1999 (c.30)(register of stakeholder schemes); work-based pension scheme means- (a) an occupational pension scheme, (b) a personal pensions scheme where direct payment arrangements exist in respect of one or more members of the scheme who are employees, or (c) a stakeholder pension scheme. Section 100 of Pensions Act 2004 Duty to have regard to the interests of members etc (1) The Regulator must have regard to the matters mentioned in subsection (2) (a) when determining whether to exercise a regulatory function (i) in a case where the requirements of the standard or special procedure apply, or (i) on a review under section 99, and (b) when exercising the regulatory function in question.

6 (2) Those matters are (a) the interests of the generality of the members of the scheme to which the exercise of the function relates, and (b) the interests of such persons as appear to the Regulator to be directly affected by the exercise.

7 Appendix 2 Referral to the Pensions Regulator Tribunal You have the right to refer the matter to which this Determination Notice relates to the Pensions Regulator Tribunal ( the Tribunal ). Under section 103(1)(b) of the Act you have 28 days from the date this Determination Notice is given to you to refer the matter to the Tribunal or such other period as specified in the Tribunal rules or as the Tribunal may allow. A reference to the Tribunal is made by way of a written notice signed by you and filed with a copy of this Determination Notice. The Tribunal s address is: The Pensions Regulator Tribunal Bedford Avenue London WC1B 3AS Tel: The detailed procedures for making a reference to the Tribunal are contained in section 103 of the Act and the Tribunal Rules. You should note that the Tribunal rules provide that at the same time as filing a reference notice with the Tribunal, you must send a copy of the reference notice to The Pensions Regulator. Any copy reference notice should be sent to: Determinations Support The Pensions Regulator, Napier House Trafalgar Place Brighton BN1 4DW. Tel: