The case highlights how all scheme members should be cautious when considering pension transfers or investment returns that sound too good to be true, and demonstrates that TPR will use its powers when necessary to protect savers.
During its investigation, TPR found that approximately £5,800,000 of new members’ accrued pension savings were put at risk through being transferred into the London Quantum Scheme between August 2014 and May 2015.
A final notice, published today, confirms TPR’s appointment of an independent trustee, Dalriada Trustees Limited, to the London Quantum Retirement Benefit Scheme to the exclusion of Dorrixo Alliance (UK) Limited, a company under the directorship of Stephen Alexander Ward and Anthony Salih.
Nicola Parish, Director of Case Management at TPR, said: "The concerns we received about the scheme highlighted worrying factors regarding its governance.
"This case should act as a reminder to all savers, pension scheme trustees and administrators to remain alert to the dangers of transferring pension savings in order to access unrealistically high returns often associated with exotic sounding investment opportunities."
TPR found that, as trustee, Dorrixo had a serious disregard to the obvious risks that members might be misled about the true nature of the investments held by the scheme and the risks that came with those investments.
TPR appointed Dalriada as independent trustee to the scheme with the power to act to the exclusion of Dorrixo. TPR’s concerns included:
-
Risky and illiquid investments – the investments exhibited inappropriately high levels of risk which members were not made aware of.
-
Lack of documentation – TPR investigations revealed significant gaps in the expected documentation. Whether or not documentation actually existed in relation to some of the scheme’s investments was doubtful and called into question their legitimacy.
-
Introducer fees – The scheme was promoted to potential new members by introducers, including cold callers, who were paid by commission (sometimes up to 30%) in breach of trust.
-
Advisers – No auditor was appointed to the scheme and Dorrixo failed to take proper advice on the investments.
TPR received reports from both members and administrators of some of the transferring schemes highlighting their concerns in relation to the London Quantum Retirement Benefit Scheme.
|
