Two pension trustee firms wound up by High Court

The High Court has wound up two Preston-based pension trustee companies following an investigation by the Insolvency Service.

The judgment, made on the 28 March 2017, concerned Gleeson Bessent Trustee Services Ltd, which administered nine occupational pension schemes and Gleeson Bessent Trustee Ltd, which was the trustee of three of the schemes. These were the Focusplay Retirement Benefit, the Focusplay No 2 Retirement Benefit Scheme and the P.S.P Retirement Benefit Scheme.

The petitions to wind-up the companies were presented under s124A of the Insolvency Act 1986 on 16 February 2017. It followed an investigation by the Insolvency Service that found the companies did not market the various schemes but approved a series of investments which were then offered to the general public through a network of introducers and sub-introducers.

Those who chose to take up the offer were charged an initial fee of up to £1,645 in addition to a percentage annual management fee which could be as much as £2,500, with total fees generated by the nine schemes being in excess of £3.5m over 3 years.

In addition, the companies were found to have failed to adequately carry out their trustee role by neglecting to obtain independent investment advice, failing to comply with their own governance statements and by failing to adhere to pensions legislation and guidance issued by The Pensions Regulator. In particular, it was uncovered that the companies were making loans from the schemes to the sponsoring employer as well as to associated companies and individuals.

The court heard there had been a failure to ensure share certificates were obtained in return for investments made, that the companies had operated with a lack of transparency, particularly in not ensuring that investors were aware their funds were being put into high risk investments. It was also claimed that members of the schemes were offered contrived and artificial employment in order to comply with guidance then in place.

Commenting on the case, Company Investigations North group leader Scott Crighton said: “The Insolvency Service will investigate and bring to a halt the activities of companies that fail to meet the required standard for dealing with investment funds placed with them by members of the public and that are found to be operating against the public interest.

“For their own protection, members of the public need to be wary of any uninvited contact offering them a free pension review and to be aware that many of the products on offer are unregulated and high risk or may even be outright scams and the safest course of action is to simply ignore them.”

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