Two individuals and a trustee company have been banned from acting as pension trustees following a pension scams investigation by The Pensions Regulator (TPR).
TPR's determination panel, a separate division from the regulator, banned David Fellowes, Francine Becker and a company they controlled, Avalon Pension Trustees Limited, from acting as trustees of trust schemes in general.
The panel determined which decisions TPR could make. The panel also appointed independent trustee Dalriada to take control of the schemes and ensure they were administered properly.
According to TPR, Fellowes and Becker acted as trustees of nine pension schemes that were involved in scams activity. In a letter to the regulator in October 2013, Avalon was appointed to replace Fellowes and Becker as the trustee, but no date was given for this appointment, suggesting the individuals were controlling Avalon.
TPR also noticed more than £11m of funds were paid into the schemes in seven months of the first scheme set up by Fellowes and Becker. The regulator suggested "pension liberation" (pension scam) was taking place and said any trustee would have noticed this scam.
The regulator argued that the trustees did not have sufficient skill, understanding, or sufficient interest to manage the schemes and act in the interests of its members. It said trustees demonstrated a "lack of integrity" due to a series of "persistent breaches of pension legislation".
For example, TPR said four of the nine schemes were not registered with TPR and this was in breach of registration requirements. Moreover, the trust deeds were "fundamentally contradictory" as the trustees stated the schemes were both occupational and personal pension schemes, which the regulator said was not possible.
TPR also noted the trustees had invested a "substantial proportion" of the schemes' assets in an offshore bond which Dalriada confirmed as "high risk". The fees charged by Fellowes and Becker were considered to be "inappropriate, excessive and in breach of trust". TPR concluded Avalon was used as a payment vehicle for Fellowes and Becker - further evidence of pensions liberation.
Andrew Warwick-Thompson, TPR's executive director, said: "This case illustrated a number of hallmarks of pension scams including cold-calling, excessive fees, high-risk investments based overseas and incorrect statements to members as to the tax consequences of transferring to the scheme."
He added: "We're working with the pensions industry, government, other regulators and the police to disrupt pension scams. We're taking action in the courts to shut down scam schemes, and in the regulator's determinations panel to appoint independent trustees to make sure schemes are run legitimately."