The Pensions Regulator has banned three people from acting as pension scheme trustees after “serious and persistent” breaches of investment regulations.
Robert Angus Hill, Nicholas John Halton and Simon Christopher Ragg quit as trustees of the Hugh Mackay retirement benefits scheme in October.
An investigation by the regulator found that the “vast majority” of the scheme’s assets had been placed directly into property-related investments, including commercial property worth more than £35m.
TPR says the scheme’s accounts showed it was also committed to repay more than £21m in bank loans secured against the property assets.
The trustees are accused of having a vested interest in two of the property deals examined by the regulator.
The Pensions Regulator chief executive Bill Galvin says: “Our investigation in this case unearthed some of the most worrying examples of mismanagement of a final-salary pension scheme that we have seen. Typically, the sponsoring employer supports the pension scheme – here, the scheme provided the company’s main source of income.
“The risk to members’ benefits posed by the investment strategy and borrowings secured against scheme assets was stark; and it is difficult to imagine a more clear-cut conflict of interest than a trustee effectively negotiating with himself as the vendor in a property deal.
“The scheme’s finances are in a serious state and the Pension Protection Fund will be required to step in to pay compensation to members.”