TPO launches Pensions Dishonesty Unit

The Pensions Ombudsman (TPO) has launched a Pensions Dishonesty Unit to investigate allegations of serious breaches of trust, misappropriation of pension funds and dishonest or fraudulent behaviour by pension scheme trustees.

The ombudsman announced the plans in light of a number of recent high value determinations, including the around £14m determination given in the Norton Motorcycles case and the nearly £3m determination in the Henry Davison cases.

In order to address this trend, the Pensions Dishonesty Unit will aim to hold wrongdoers responsible for any unlawful gains made and ensure they repay the monies to scheme members.

Whilst some of the schemes may also be eligible for the Fraud Compensation Fund, TPO emphasised that any money obtained for the members through the Pensions Dishonesty Unit process will come directly from the hands of those responsible.

The unit is already up and running on a pilot basis, made up of experienced members of staff from TPO’s casework and legal departments.

Commenting on the news, pensions ombudsman, Anthony Arter, stated: “A noticeable trend in recent years has been the increase in cases relating to trustee dishonesty and wrongdoing leading to substantial losses for individual pension scheme members.

“The Norton Determination demonstrated a change of approach for us which not only holds trustees personally liable but also has the potential to benefit all scheme members.

“The extension of this approach to other cases involving trustee dishonesty through the new Pensions Dishonesty Unit pilot is very significant; enabling quicker redress and the recovery of funds that may otherwise not be achieved, directly from the guilty party.”

In addition to this, TPO confirmed that whilst it has recently made two further determinations of around £1.2m on the Grosvenor schemes, it is also following up with enforcement action in the courts, in recognition of “how difficult it is for members of the public to pursue these matters alone”.

The ombudsman also encouraged both formal applications and informal contact from independent trustees to discuss its potential involvement on any particular cases, with oral hearings already scheduled in relation to two other schemes in February and March.

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