Two former trustees will appear before court as part of a prosecution brought by the Pensions Regulator over allegations that the pair made illegal loans and investments.
Stephen Smith and David Boardman were trustees of the Worthington Employee Pension Top Up Scheme.
The pair appeared at Preston Magistrates’ Court on October 19 accused of making five prohibited loans from the scheme and one prohibited investment.
While Smith pleaded guilty to making five prohibited loans and not guilty to the sixth charge of making a prohibited investment, Boardman did not enter a plea.
Both men were released on bail and will appear at Preston Crown Court on November 22.
A third individual, Derek Thomas, worked as a professional adviser to the scheme. He has been charged with four counts of assisting or encouraging prohibited loans, and will appear at Preston Magistrates’ Court on October 26.
The value of the loans and the investment made by the scheme totalled £700,000, which included three loans by the scheme to Stonewell Property Company, the parent company of sponsoring employer Marcus Worthington and Company.
It also included an investment in a retail park where land had been let on a long lease to companies connected and associated with Marcus Worthington and Company.
This case signals a crackdown across the industry on pension scheme malpractice.
On October 13, two pension trustees calling themselves “qualified financial advisers” were ordered to pay back scheme members more £880,000 by the Pensions Ombudsman after it found evidence of “multiple breaches of trust and many acts of maladministration”.
In the case brought by TPR, the regulator reminded the industry that certain employer-related investments made by an occupational pension scheme are prohibited.
It said that breaching these rules is a criminal offence and can potentially lead to an unlimited fine and/or imprisonment.
This article first appeared on FTAdviser.com
