The Pensions Regulator has shut down five pension liberation schemes, which together received transfers totalling more than £134m from over 1,400 individuals.
The regulator was concerned that the schemes provided a cash payment to the member rather than providing retirement benefits, and that 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.
TPR started High Court proceedings against A Admin Ltd, Warwick Pensions Administration Ltd, Lincoln Pensions Administration Ltd, Baxendale Walker LLP, and Paul Baxendale-Walker, in July last year.
It said that 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 wanted.
The schemes sought to allow members to access their pension funds as cash through a supposed legal loophole, the regulator said. But the High Court ruled that a gap in the law did not exist, finding in the regulator's favour on three preliminary legal issues.
The defendants have agreed to wind up the five schemes, stop acting as trustees of the schemes, and not accept transfers from other pension schemes.
TPR executive director Andrew Warwick-Thompson said: 'This was one of the biggest, most highly organised pension liberation exercises we've seen. It spread quickly as a result of marketing by a network of introducers who attracted individuals by direct marketing including cold-calling.'
