Regulator intervenes after pension switching chaos

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Regulator intervenes after pension switching chaos

The Pensions Regulator has intervened and appointed an independent trustee to a scheme after a client struggled to switch his pension despite ombudsman backing.

Sally Holmes, daughter of Robert Dewar, told FTAdviser she is still waiting for the pension trustee of the Commando 2012 Pension Scheme to make good on a pension switching request made by her father in February 2018, alongside redress payments ordered by the Pension Ombudsman.

Mr Dewar transferred his £155,891 pension from the Halifax defined benefit scheme to the Commando scheme in 2012.

According to Ms Holmes, who took over her father’s finances due to his ill health in 2017, her father's transfer was carried out by Simon John Colfer who later admitted to conning hundreds of people in a complex pension fraud, and was given a suspended prison sentence in May 2018.

Colfer was found to have posed as a financial adviser promising savers they would receive a cash lump sum of up to 25 per cent of the transfer value if they transferred using his services. As a result of the transfer Mr Dewar had to pay a tax charge to HM Revenue & Customs of £14,000.

A Pension Ombudsman decision published last month (May 28) showed due to Mr Dewar’s health deteriorating, he wanted to start drawing down his pension. He submitted the relevant forms in August 2017 to access his pension in November that year.

But after delays in processing the payments, Mr Dewar decided to switch his pot to PensionBee in February 2018. At that point his pension fund value was worth £137,620.

The transfer request was passed to Stuart Garner, the scheme trustee, on March 14, 2018.

In April, Mr Garner wrote to Ms Holmes explaining that the scheme had had an unprecedented amount of transfer requests in the previous months, "primarily due to an HMRC tax charge to some members and they requested transfers out to pay tax bills".

The Commando scheme is primarily invested in preference shares in the capital of Norton Motorcycles, which is owned by Mr Garner.

He added: "We are working closely with the Norton accounting team and making good progress in getting transfer requests completed.

"As the scheme is fully invested, it does take time for Norton to cashflow all requests as they are obviously a trading business and using the capital for trading the business. They are in good shape, it is simply a timing issue as they manage funds for the transfers."

Mr Garner said Ms Holmes that her father’s case was then at "the top of the transfers list" and that he expected to transfer the funds in mid-May.

Ms Holmes said this was the last time she had heard from Mr Garner, before taking the case to the Pension Ombudsman, who upheld the complaint.

According to the Pension Ombudsman, Mr Garner failed to engage with its officials throughout the process and Ms Holmes did not hear from him afterwards.

In his determination, pension ombudsman Anthony Arthur said the organisation had received "a number of complaints concerning the trustee’s failure to action members’ requests to withdraw their monies from the scheme, and from two other pension schemes of which Mr Garner is the sole trustee; the funds of which are also invested solely in Norton Motorcycle".

Mr Arthur noted "there is a clear conflict" in Mr Garner being the sole trustee of the scheme, the sole director of Manorcrest Limited, the provider of the scheme, and chief executive and owner of Norton Motorcycles.

The Pensions Ombudsman then reported the case to TPR, which intervened. TPR appointed Dalriada Trustees as an independent trustee for the pension scheme, in replacement of Mr Garner.

Mr Garner told FTAdviser: "I am no longer the trustee, but of course the scheme will honour the transfer request. The scheme has had some frustrating issues to work through and this has caused some delays. 

"However these have been worked through and a new professional trustee has now been appointed which will help greatly."

Ms Holmes said: "My dad's health is deteriorating rapidly, I just hope something comes out [of this case soon]. My mum needs to care for him and works full time in the business my dad created. This would really help."

She added: "It is really good news [that an independent trustee was appointed]. This is the first real hope I've had in the last three years."

maria.espadinha@ft.com

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