Legal action by TPR has closed down five connected pension liberation schemes that received transfers totalling more than £134m from over 1,400 individuals.

TPR was concerned the schemes were established with the main purpose of providing a cash payment to the member rather than providing retirement benefits. It believed this constituted misuse or misappropriation of pension scheme monies within sections 15 and 16 of the Pensions Act 2004, and pension liberation as defined in section 18 of the Pensions Act 2004.

High Court proceedings began in July 2013 against A Admin Ltd, Warwick Pensions Administration Ltd, Lincoln Pensions Administration Ltd, Baxendale Walker LLP, and Paul Baxendale-Walker.

The schemes operated according to complex arrangements that purportedly enabled funds to be lent to the member via a company under the member’s control, which would become their employer under one of the schemes. The member could then use the money as they wished.

The schemes sought to allow members to access their pension funds as cash through a supposed legal ‘loophole’. In May 2014, the High Court ruled that this supposed gap in the law did not exist, finding in the regulator’s favour on three preliminary legal issues.

The defendants have now confirmed that the schemes have been wound up, they no longer act as trustees to the schemes and they no longer accept transfers from any other pension schemes.

TPR executive director Andrew Warwick-Thompson said it sends a message to anyone operating in the market that TPR will shut down any schemes that “pose the greatest risk to members’ pensions, and which may, as a result, undermine confidence in the pensions system generally”.

He explained it was one of the biggest, most highly-organised pension liberation exercises they have seen and spread quickly as a result of “marketing by a network of introducers who attracted individuals by direct marketing including cold-calling.”

“Fees of 11 per cent, totalling more than £14.7m, were charged to implement these transfers. When challenged in the High Court, the defendants’ strategy was clearly shown to be based on an incorrect interpretation of pensions law,” he added.

Share Story: