Jessica O'ConnorThe Pensions Regulator (TPR) has warned trustees to follow strict rules on scheme loans or risk enforcement action, after taking action against two former trustees who broke employer-related investment (ERI) regulations.
A new TPR report details how Stephen Smith, of Broughton-in-Furness, was given a suspended jail term after admitting to using scheme funds to make five prohibited loans to entities linked to Marcus Worthington and Company Ltd, the scheme’s sponsoring employer.
In a separate regulatory case, trustee John Marcus Worthington was handed a £29,000 penalty under section 10 of the Pensions Act 1995.
TPR has recently reiterated that it expects them to be highly skilled, diligent, and familiar with its ERI guidance.
The regulator has said it will continue raising standards of trusteeship through its supervisory approach and forthcoming guidance on what good practice looks like.
Gaucho Rasmussen, executive director of regulatory compliance at TPR, said: “The pensions system depends on savers having confidence that trustees act with integrity, put members’ interests first, and possess the right knowledge and skills.
“When trustees flout investment rules or fall short of expected standards, it undermines that confidence. That’s why we acted to replace them and pursued both criminal and regulatory sanctions. With an independent trustee now in place, the focus can shift to restoring scheme funds wherever possible.”
