Stephen Smith given suspended sentence for making forbidden loans with pension scheme money
The Pensions Regulator (TPR) has prosecuted Stephen Smith, a former trustee of the Worthington Employee Pension Top-Up Scheme (WEPTUS) and company director.
Smith lent money to entities connected to the scheme’s sponsoring employer, using pension scheme funds. In total, he made five of these prohibited loans. He pleaded guilty to making the loans at an earlier court appearance.
Smith has been given a ten-month jail term, suspended for 12 months. He will also have to complete 150 hours of unpaid work in the community and pay £1,000 in prosecution costs.
Three loans, totalling around £400,000, were made to Stonewall Property Company Limited, the parent company of the scheme’s sponsoring employer. Two other loans, totalling around £540,000, were made from the scheme to Brockholes Pavilion Trust Fund – a trust-based occupational scheme established in 1986 for the benefit of Worthington family members.
The loans were then converted into another employer-related investment while failed, although Smith was not a trustee when the failed investments were made.
His Honour Judge Unsworth KC said: “Any mismanagement of pension schemes has the potential to cause real harm to people, many of whom will have sought to rely on those investments to keep them in later life. Mismanagement of schemes undermines public trust in the pension system in general”.
Nicola Parish, TPR’s Executive Director of Frontline Regulation, said: “Rules restricting trustees from lending scheme money to a sponsoring employer are there to safeguard workers’ pension pots.
“Smith chose to flout these rules and, as this prosecution shows, we will take tough action to punish those who risk the pension funds they are entrusted to look after.”
