28 March 2023: Today, the Pensions Authority publishes a statement on the settlement of legal proceedings in relation to its High Court application under section 63 of the Pensions Act.
On 8 June 2021, the Pensions Authority (Authority) applied to the High Court for an order under section 63 of the Pensions Act, 1990, as amended, to remove Wealth Options Trustees Limited (WOTL) as the professional trustee of seven sample small self-administered pension schemes (SSAPs) which invested in Dolphin loan notes issued by MUT 116 Limited, and to replace WOTL with Pillar 2 Pension Trustees Limited (Pillar 2), a professional trustee company.
Today, the Authority has resolved to suspend the legal proceedings indefinitely on the basis that WOTL has agreed that:
- WOTL will retire and cease to act as trustee of the seven SSAPs to which the Authority’s High Court application refers and will co-operate with the appointment, in accordance with scheme rules, of a replacement professional trustee. This replacement process should happen in a timely manner and is envisaged to take place within six weeks. Any extension to this period must be sanctioned by the Authority;
- WOTL will retire and cease to act as trustee of all other SSAPs for which it acts as a professional trustee in a phased and orderly manner and will co-operate with the appointment, in accordance with scheme rules, of a replacement professional trustee. This replacement process should happen in a timely manner and is envisaged to take place within 12 months. Any extension to this period must be sanctioned by the Authority;
- Neither WOTL, nor its current directors, will accept any new appointment to act as a trustee of a pension scheme (including SSAPs) for a five-year period; and
- WOTL will communicate with impacted scheme members and employers over the coming weeks to inform them of the process by which WOTL will retire and cease to act as professional trustee of their scheme and be replaced by another professional trustee and will provide such members and employers with contact details for further information.
Pillar 2 has confirmed that it is willing to act as replacement professional trustee of any scheme for which WOTL retires and ceases to act as professional trustee, where requested by the relevant employer/persons under scheme rules. The Authority will oversee the transfer of trusteeship to Pillar 2 and work with all parties to ensure minimal disruption to members. The staff of WOTL will continue to work with Pillar 2 to facilitate an orderly transition.
WOTL has agreed that it shall use all best endeavours to ensure that this transfer is carried out with minimal disruption to impacted scheme members. In particular, in respect of a transfer to Pillar 2, impacted scheme members will not directly or indirectly bear or be charged for costs or outlays relating to the transfer. In respect of a transfer to an alternative replacement professional and pensioneer trustee, WOTL has agreed to use all best endeavours to ensure that such transfer is carried out with minimal cost to impacted scheme members.
The Authority considers that, within the ambit of its powers, this resolution is the best and most time-efficient way to determine this matter in members’ best interests. The Authority has secured WOTL’s commitment to retire and cease to act as professional trustee in respect of all its schemes, and to transfer its trusteeship with minimal disruption and cost to scheme members.
The Authority will continue to oversee and investigate pension scheme trustees and will take enforcement action when it is appropriate to do so.
Commenting on this case, Grace Guy, Head of Supervision and Enforcement said:
“It is a fundamental trustee responsibility to avoid circumstances where a trustee’s personal/financial interests can cause a potential conflict of interest with the member’s interests. This applies to all pension scheme trustees including trustees of small self-administered pension schemes (SSAPs) and to all investments including member directed investment. Trustees should consider these matters carefully and take whatever steps are necessary to ensure members’ interests are not compromised, recognising that there are real consequences if they do not do so. The Pensions Authority believes that the resolution achieved today is, in these circumstances, the best outcome for members by avoiding protracted legal proceedings, minimising costs and reducing the risk of a disorderly transfer process. The Authority will continue to oversee and investigate pension scheme trustees and will take enforcement action when it is appropriate to do so’’.
The Authority will not be making any further public comment on this particular matter at this time.
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