Great to see the Pensions Ombudsman end the year with another success for the Pensions Dishonesty Unit in the case of the Optimum Retirement Benefit Plan. The case was brought after a referral by Dalriada Trustees Limited following its appointment by the Pensions Regulator as independent trustee to the Plan on 13 February 2018. Approximately 288 members had transferred a total of £13.4 million to the Plan, which was established in 2015. After transferring, some of the members accessed a portion of their pension funds by entering into loan agreements with companies, including one that was owned by one of the scheme trustees.

On 20 December, following an investigation carried out by the Pensions Dishonesty Unit, the Ombudsman upheld the complaint and made directions to recover a total of £12,578,051.44. As in previous cases investigated by the Unit, the respondents were found to have committed multiple breaches of trust and maladministration including:

  • breach of fiduciary duty to manage conflicts of interest
  • breach of statutory and fiduciary investment duties; and
  • in the case of Mr Craig, personally profiting from his position as a trustee.

In a new development, Mr Kelly and Mr Reilly were held to have acted in breach of trust by charging and accepting fees for their services at a rate that was excessive and unreasonable and failing to promptly report certain matters to the Pensions Regulator, or even to investigate whether they had a duty to do so.

The Pensions Dishonesty Unit has been a key and successful project for Antony Arter whose term as Pensions Ombudsman ends on Sunday. In his new role as Deputy Pensions Ombudsman, he has committed alongside the new Pensions Ombudsman, Dominic Harris, to continue his work in this vital area, “so those responsible for serious breaches of trust and misappropriation of pension funds can be held to account and funds recovered from the parties at fault.”

For more on the establishment of the Pensions Dishonesty Unit and the types of cases it investigates, see my March 2002 blog.