The Pensions Regulator has issued an unprecedented fine to four master trust trustees, who failed to promptly invest £1.4m in contributions from 9,081 members.
In January 2017, trustees of the Salvus Master Trust reported that the pension contributions, which had been made since 2014, were not yet invested.
Trustees are required by law to process and invest contributions from employers and employees promptly and accurately.
TPR imposed the maximum possible fine of £5,000 in the first ever penalty for this type of breach.
TPR says that, when Salvus’ trustees reported the issue, they explained the administrative problems that led to it, and then cooperated with regulators to address these problems and compensate affected members.
TPR’s frontline regulation executive director Nicola Parish says: “Pension schemes must collect and invest the contributions made by employers and employees.
“To have left so much money uninvested for this period of time is clearly unacceptable.
“Our engagement with Salvus has ensured that not only the thousands of members affected have not suffered any detriment, but also the master trust’s systems have been improved to stop this happening again.
“New legislation for master trusts came into force on 1 October which puts safeguards around these schemes to better protect members.
“Master trusts have to prove that they meet standards in five areas, including proving that they have adequate systems and processes. We will continue to take tough to against schemes which do not meet their legal duties.”