TPR bans trustees over attempted employer-related investment

The Pensions Regulator (TPR) has banned three professional trustees from acting as trustees for workplace pension schemes for attempting to make employer-related investments without the required legal and investment advice.

Marcus Johnson, Linda Turner and Andrew Stowers, who worked for N W Brown Trustees Limited, attempted to complete a prohibited employer-related investment of £500,000 from a pension scheme to its employer.

Despite the trustees signing a letter of comfort that states they had obtained the necessary legal and investment advice, a concerned scheme administrator contacted the regulator in November 2016.

They cited worries that the appropriate advice had not been obtained, as the trustees had attempted to make an investment in the employer just days earlier, which has been denied.

When TPR asked Johnson to provide them with copies of the legal and investment advice they had supposedly received, he provided limited documents which did not contain any legal advice and a sole piece of investment advice which supported the conclusion that the transaction was an employer-related investment.

TPR concluded that the trustees “not only lacked sufficient knowledge and understanding about whether the investment was even legal but also failed to get appropriate advice”.

The regulator continued: “We therefore concluded that we would formally start enforcement proceedings to prohibit the individuals responsible for these failings from being trustees.”

Although the accused trustees did not accept the case team’s prohibition case, they agreed to never act as scheme trustees again, except in the case of allowing Johnson to remain as a trustee for a small, family self-administered scheme.

N W Brown Trustees Limited and its parent company N W Brown Group Limited confirmed that they would wind down or transfer all appointments to occupational pension schemes by the end of 2019 and would cease to offer trustee services in relation to occupational pension schemes.

N W Brown Limited had previously acted as a professional independent trustee for 23 pension schemes.

TPR concluded: “As a result of these agreements we were satisfied that the risk to this and other schemes had been eliminated and therefore there was no need for costly and extensive litigation.

“However, if any of the undertakings are breached or if any new evidence comes to light that we were previously unaware of, we continue to reserve the right to pursue these proceedings in relation to prohibition and any criminal prosecution, or any other relevant enforcement action.”

    Share Story:

Recent Stories

Time for change: An interview with Nick Burns, CEO, Gallagher’s Employee Benefits Consulting Division, U.K
Francesca Fabrizi interviews Nick Burns, CEO, Gallagher’s Employee Benefits Consulting Division, U.K about the UK pensions industry and asks why the time for change is now

Addressing climate change risk in fixed income portfolios
Francesca Fabrizi meets Lee Clements, director of SRI research at FTSE Russell, to discuss climate change risk in investment portfolios