The deputy pensions ombudsman has upheld two complaints against the trustees of the Focus Group Administration, with former sole trustee of the scheme and Fide Chess Grandmaster, Simon Williams, ordered to repay over £730,000 into the scheme.

The Pensions Ombudsman (TPO) received complaints that the trustees had failed to comply with statutory requirements, guidance from The Pensions Regulator (TPR) and governance requirement.

In addition to this, TPO had also received complains that the scheme failed to operate the necessary controls to ensure the effective and transparent administration of the scheme and had committed multiple acts of maladministration.

TPO also received complaints that the trustee had not complied with their various duties, under statute and case law, concerning the investment of the scheme’s assets and facilitated a sophisticated pension liberation arrangement.

The scheme was established in March 2013, with Williams as sole trustee and Glenn House, sole director of Brambles Administration Limited, as the administrator.

Williams was the sole director and shareholder of Focus Administration Limited, the scheme’s sponsoring employer. From August 2016, Focus was appointed as sole trustee by Williams.

Approximately 11 members transferred a total of approximately £830,000 of pension benefits into the scheme.

However, investments made with the scheme funds were generally in companies that: had only been incorporated a short while before the investments were made; had been trading at a loss; and/or were companies in which one or more of Williams’ associates had an interest.

Many of the underlying property assets or development projects were geographically concentrated around Liverpool and Northern England.

One of the investments involved the purchase of office pods and was structured on paper to result in a capital gain payment for the member. However, this was a sophisticated pension liberation scheme which involved back-to-back property transactions, not registered with the Land Registry, and the capital gain payment was paid from the member’s pension fund.

The complaints highlighted the impact of this, with one complainant, Mr M, losing nearly 50 per cent of his pension, while a second complainant, Mr Y, said he had lost his entire pension.

The deputy pensions ombudsman has now upheld the complaints, finding that Williams and Focus had committed multiple breaches of trust and, alongside Brambles, many acts of maladministration, which have caused the loss of scheme funds and have severely impacted scheme members’ pensions.

In particular, TPO found that the trustees had acted in breach of trust by failing to avoid being in a position of conflicting interests and failing to have in place and operate the necessary internal controls, and by failing to have adequate regard to the need for diversification of investments.

In addition to this, it found that the trustees had committed maladministration by failing to make the necessary enquiries to establish that the payment of scheme funds to members on joining the scheme constituted an unauthorised payment, as well as failing to have regard to TPR's code in respect of investment governance.

As part of the decision, TPO directed Williams to repay £738,768.60 into the scheme; and Williams and Brambles to pay each applicant £6,000 in recognition of the distress and inconvenience.

The deputy ombudsman also confirmed that it has shared the determination with TPR.

TPO’s determination is final and binding, although it is subject to appeal to the High Court on a point of law.

The complaints were investigated as part of TPO’s Pensions Dishonesty Unit, which was launched to investigate allegations of serious breaches of trust, misappropriation of pension funds and dishonest or fraudulent behaviour by trustees, including others involved in the pension arrangement such as managers and administrators.

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