Norton Motorcycles director and scheme trustee, Stuart Garner, has been ordered to repay all the money that he invested into his own firm from the company pension schemes.

The Pensions Ombudsman (TPO) upheld the complaints from affected members and Dalriada Trustees who lost out following Garner’s pensions liberation scam.

Garner was director and CEO of the now insolvent Norton Motorcycles Holdings Limited and trustee of it three pension schemes.

He used the funds from the pension schemes to purchase preference shares in his own company after individuals were encouraged by certain ‘advisers’ to make pension transfers into the schemes.

The affected members and Dalriada complained to TPO that the manner of investing the schemes’ fund did not accord with its purpose, Garner acted under a conflict of interests, he breached his investment duties and committed multiple breaches of trust, and that Garner and the administrative firm, LD Administration, failed to provide an adequate administration process for any of the schemes.

This resulted in members’ benefits and rights in the schemes being lost.

TPO found that Garner has acted dishonestly and in breach of his duty of no conflict, his duty not to profit from the pension schemes and his duty to act with prudence.

Additionally, the investments he made in preference shares of Norton Motorcycles were in breach of the his statutory, investment, and trust law duties, and he breached his statutory duties to have in place adequate controls to manage conflicts of interest and ensure the effective administration of the schemes.

It also ruled that Garner breached his statutory duty to have acquired knowledge and understanding of the law surrounding pensions, and that he failed to ensure that scheme investments were appropriate for scheme members.

TPO found that LD Administration was guilty of maladministration as it lacked the necessary knowledge or experience to administer the schemes.

Garner has been ordered to repay the sum paid by each scheme to purchase shares in Norton Motorcycles back into each scheme with 8 per cent per annum interest from the date of investment.

Furthermore, TPO ordered him to pay £6,000 to each individual member complainant for the “exceptional maladministration causing injustice”, while LD Administration was ordered to pay £3,000 to each complaining member.

However, LD Administration is an insolvent company, so these funds are subject to availability.

Garner has also been ordered to pay Dalriada the restorative payments, alongside 8 per cent interest, from the date of notification.

Dalriada has been told to establish and calculate from the available records, the date of investment in the shares, the amounts they relate to, any transfer payments to members and dividend payments paid under the guarantees.

Once Dalriada receives its payment from Garner, it has been ordered to pay to each scheme “such proportion of the total amount that reflects the proportion due to each scheme, and determine the allocation between the members, or other beneficiaries, in accordance with each of the schemes’ trust deed and rules".

Commenting on the decision, Work and Pensions Committee (WPC) chair, Stephen Timms, said: “This will be a welcome vindication for those who have lost out - but it has been a long time coming. Mr Garner, whose blunted moral antennae have been so forensically exposed by the ombudsman, must now comply with this ruling and return their savings immediately.

"Any further delay will be all the more painful for savers because concerns about this scheme were being raised as long ago as 2014, but somehow even those alarm bells were not enough to prevent this outcome.

"This shocking case raises serious questions about the effectiveness of the regulators involved and the protections we have for people who fall victim to pension scams.”

The WPC has previously sought answers from The Pensions Regulator (TPR) over its response to the scam. TPR installed an independent trustee to the scheme in May 2019.

The WPC again wrote to TPR following TPO’s ruling, asking what its plan of action will be from this point.

In response, a TPR spokesperson said: “We note the letter from the WPC and will be responding in due course.

"Following an investigation, in May 2019 we appointed Dalriada as the independent trustee to three pension schemes associated with Norton Motorcycles, and that Stuart Garner was the sole trustee of, to prevent other savers being disadvantaged by transferring to the schemes.

“Following the company administration, we continue to be in close discussions with Dalriada and the administrators to Norton."

To help combat scams, TPR and the Financial Conduct Authority (FCA) are relaunching their awareness campaign, ScamSmart, next month, to help savers learn the signs of potential scams and avoid becoming a victim, while TPR has also issued regular scam avoidance advice during the Covid-19 pandemic.

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