Trustees fined by TPR for failing to invest £1.4m of savings promptly
24 October 2018
Four trustees of a master trust who failed to promptly invest members’ savings for three years, affecting 9,081 members and contributions of £1.4 million, have been fined by The Pensions Regulator (TPR).
The trustees of Salvus Master Trust were fined a total of £5,000 for the problem – the maximum fine which could have been imposed by the TPR in this instance.
Trustees are required by law to process and invest contributions from employers promptly and accurately. Not doing so breaches Regulation 24 of the Occupational Pension Schemes (Scheme Administration) Regulations 1996. This was TPR’s first penalty issued following such a breach.
Salvus’ trustees reported the problem to TPR, along with a plan to rectify the failure to invest pension contributions and address the historic administration problems which led to the breach.
The master trust worked with TPR to address the problems and make sure all of the affected members were returned to the financial position they would have been in if this error had not occurred.
Nicola Parish, executive director of Frontline Regulation at TPR, said:
“Pension schemes must collect and invest the contributions made by employers and employees. To have left so much money uninvested for this period of time is clearly unacceptable.
“Our engagement with Salvus has ensured that not only the thousands of members affected have not suffered any detriment, but also the master trust’s systems have been improved to stop this happening again.
“New legislation for master trusts came into force on 1 October which puts safeguards around these schemes to better protect members. Master trusts have to prove that they meet standards in five areas, including proving that they have adequate systems and processes. We will continue to take tough action against schemes which do not meet their legal duties.”
TPR is the regulator of work-based pension schemes in the UK whose statutory objectives are:
- To protect members’ benefits
- To reduce the risk of calls on the Pension Protection Fund
- To promote, and to improve understanding of, the good administration of work-based pension schemes
- To maximise employer compliance with automatic enrolment duties
- To minimise any adverse impact on the sustainable growth of an employer (in relation to the exercise of TPR’s functions under Part 3 of the Pensions Act 2004 only)