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Donington MC Pension Scheme, Dominator 2012 Pension Scheme and Commando 2012 Pension Scheme - Determination notice

Standard Procedure - Determination notice under section 96(2)(d) of the Pensions Act 2004 and section 7(3) of the Pensions Act 1995.

The Pensions Regulator case ref: C94872784

Introduction

  1. By a Request dated 23 April 2019 (the Request) the case team (the Case Team) of the Pensions Regulator (TPR) asked the Determinations Panel (the Panel) of TPR, to consider the issues in a Warning Notice signed on 14 March 2019.

  2. The Warning Notice asked the Panel to make an order under section 7(3) (a), (c) and (d) of the Pensions Act 1995 (PA 95) to appoint an independent trustee to the Schemes if it was satisfied that it was reasonable to do so in order:

    1. to secure that the trustees as a whole have, or exercise, the necessary knowledge and skill for the proper administration of the Schemes pursuant to section 7(3)(a);

    2. to secure the proper use or application of the assets of the Schemes pursuant to section 7(3)(c);

    3. otherwise to protect the interests of the generality of the members of the Schemes pursuant to section 7(3)(d).

  3. The Warning Notice also asked that:

    1. the appointed trustee’s fees and expenses be paid out of the resources of each of the Schemes, under section 8(1)(b) of the PA 95;

    2. an amount equal to the fees and expenses paid out of the resources of the Schemes be treated as a debt due from the employer to the appointed trustee under section 8(2) of the PA 95;

    3. the powers and duties of the appointed trustee be exercised to the exclusion of the other trustee, under section 8(4)(b) of PA 95;

    4. the property of the Schemes be vested in, or transferred to, the appointed trustee, under section 9 of PA 95.

The decision

  1. The Panel determined that an independent trustee should be appointed and the requested related orders be made. The terms of the order are recited at the conclusion of this Determination Notice. This Notice gives the Panel’s reasons for that order.

Directly affected parties

  1. The following are the parties identified by the Case Team, and agreed by the Panel, as being directly affected by the regulatory action sought in the Warning Notice:

    1. Mr Stuart Garner, the current trustee; 

    2. Manorcrest Limited (Manorcrest), the Schemes’ employer; and 

    3. Dalriada Trustees Limited (Dalriada), the proposed independent trustee. 

The schemes and employer

  1. The Warning Notice gives the following information about the Schemes and the employer.

  2. The Schemes all have the same employer, Manorcrest, a dormant company incorporated in 2012. Mr Garner has been a director of Manorcrest since its incorporation (and has been the sole director since 5 April 2012). In addition, he has exercised and controlled the voting power attached to the sole share in Manorcrest since its incorporation.

  3. Each of the Schemes is an occupational pension scheme providing money purchase benefits which is closed to new members.

  4. Based on information provided to TPR, as at 14 November 2018, the membership of the Schemes is as follows:

    1. Donington MC Pension Scheme (the Donington Scheme) – 82 members;

    2. Dominator 2012 Pension Scheme (the Dominator Scheme) – 66 members;

    3. Commando 2012 Pension Scheme (the Commando Scheme) – 79 members

  5. TPR understands that none of the Schemes has ever had 100 or more members.

  6. The Dominator Scheme appears to have been established on 27 September 2012 and the Commando Scheme on 28 June 2012. The Donington Scheme trust deed suggests that the Donington Scheme was established on 13 March 2011. Given, however, that Manorcrest is named as party to the deed but was not incorporated until 29 March 2012, it is inferred that the date of the Donington Scheme’s deed has been incorrectly recorded and that the Donington Scheme trust deed was in fact agreed on a date after the incorporation of Manorcrest. Mr Garner has indicated that this is likely to be the case.

  7. Mr Stuart Garner is the sole trustee for each of the Schemes and has been since the Schemes were established in 2011 / 2012. 

The schemes' assets

  1. The principal assets of the Schemes consist of preference shares (the Preference Shares) issued by Norton Motorcycle Holdings Limited (Norton). The only other assets of the Schemes are nominal cash holdings.

  2. The value of the Preference Shares is presently unclear but the Case Team have provided evidence that in 2012 and 2013 the Schemes invested a total of approximately £9,740,030 in them, as follows:-

    1. Donington Scheme - £3,471,234

    2. Dominator Scheme - £3,243,990

    3. Commando Scheme - £3,024,806

Norton

  1. Norton was incorporated on 28 September 2009. Mr Garner has at all material times been in control of Norton by reason of holding the majority of its ordinary shares (which carry with them voting rights, while the Preference Shares do not). Mr Garner has also, at all material times, been a director of Norton.

  2. The Case Team understands that the funds received by Norton from the issue of the Preference Shares have been used to acquire the Norton motorcycle brand and to invest in a UK manufacturing plant for motorcycles which is owned and run by Norton’s trading subsidiary, Norton Motorcycles (UK) Limited (NMUK). Norton also owns the site on which the manufacturing plant operates.

Background

  1. Having received reports in relation to various issues including the Schemes’ investments, the Case Team wrote to Mr Garner on 1 February 2018 setting out its concerns that the Schemes’ investments might be insufficiently diversified and might breach requirements relating to employer related investments. The letter set out that TPR was considering the possible use of its powers to appoint an independent trustee and asked to discuss the possibility of Mr Garner voluntarily appointing an independent trustee. Following this, and subsequent, correspondence, Mr Garner advised that he had been having discussions with Dalriada. These discussions have not to date led to the appointment of an independent trustee and, given the length of time that has elapsed, the Case Team is asking for Dalriada to be appointed as trustee to the Schemes pursuant to section 7 of PA 95. 

The Case Team’s concerns

  1. The Warning Notice sets out the principal concerns justifying the appointment of an independent trustee as follows.

Conflict of interest

  1. In its Warning Notice the Case Team submits that Mr Garner has acted in circumstances where he has an acute conflict of interest given his role as sole trustee of the Schemes and his role as director (and shareholder) of Norton.

  2. On 13 September 2018 in response to TPR’s request for information, Mr Garner confirmed that he had been aware of the conflict “on origination of the schemes, 28.06.2012”.

  3. The Case Team asked Mr Garner to identify the steps he had taken to address his conflict of interest. In his response of 13 September 2018 he stated “From the outset I have continually ensured that I represent members correctly and deliver all benefits to them, this has been documented by Liddell Dunbar our Administrator as they have records of all member benefits paid. I have ensured we have an Administrator and always kept any Norton commercial decisions in the best interests of Norton and any scheme decisions for the best interests of the scheme. Actually a healthy scheme is good for Norton and a healthy Norton is good for the schemes. So the conflict can be managed quite successfully when properly understood. I have ensured that Norton observe the scheme members and rules and also ensured that the schemes observe Norton and enable it to trade properly. I do feel this has been well managed and both parties are delivering on expectation and what has been communicated to members.”

  4. Mr Garner also acknowledged the conflict in a Trustee Conflicts of Interest Statement which stated that steps had been taken to mitigate this. Such steps appear to include the appointment of a professional and independent administrator. In an email dated 13 September 2018, Mr Garner explained that in 2014 he sought to appoint another independent trustee but was unable to find anyone suitable who would accept the appointment.

  5. The Case Team submits that it is reasonable for the Panel to make an order for the appointment of an independent trustee so that decisions in relation to the Schemes’ investments can be made by a person who is not in a position of conflict. The appointment of an independent trustee would secure the proper use and application of the assets of the Schemes (section 7(3)(c)) and protect the interests of the generality of the members of the Schemes (section 7(3)(d)).

Inappropriate investment decisions

  1. The Warning Notice states that, as the sole trustee of the Schemes Mr Garner owed duties to the members, in both common law and statute, in relation to the making of investments on behalf of the members. In particular, Mr Garner owed common law duties to act with prudence in relation to investments. The Case Team argues that by investing nearly 100% of the Schemes’ assets in the Preference Shares, Mr Garner has breached this obligation. The members’ pension benefits have been placed at unnecessary risk, given that the stated investment return (of 5% pa) and the underlying security of the investment are entirely dependent on the financial health of Norton. The Case Team argues that Mr Garner’s actions are not those of a prudent trustee.

  2. Similarly the Warning Notice argues that Mr Garner has also breached his statutory duties. Regulation 7(2) of the Occupational Pension Schemes (Investment) Regulations 2005 (the Investment Regulations) requires that “... the trustees of the scheme in exercising their powers of investment, … in exercising the discretion, must have regard to the need for diversification of investments, in so far as appropriate to the circumstances of the scheme.”

  3. The Warning Notice submits that in choosing to invest almost all of the Schemes’ assets in the Norton preference shares, Mr Garner failed to have regard to the need for diversification of investments, and was therefore in breach of regulation 7(2).

  4. For each of the Schemes the statement of investment principles states that “The Trustee [i.e. Mr Garner] recognises a number of risks involved in the investment of this Scheme's assets, including trading risks in respect of the Company, liquidity risk and political risk.” In addition, each of the Schemes’ statement of investment principles provides that “The Trustees intend to ensure that the Scheme has an appropriate degree of liquidity given predicted cashflows in respect of benefit payments.”

  5. Notwithstanding the fact that the Schemes’ statements of investment principles recognised the need for sufficient liquidity, the Case Team argues that there is in fact no liquidity in the Schemes given that all of the assets have been invested in the Preference Shares (save for some very limited cash in the Schemes’ bank accounts). Moreover, (i) any redemption of the Preference Shares is entirely dependent on Norton or NMUK having sufficient cash flow (albeit that the Case Team recognises that certain members have transferred out of the Schemes) and (ii) members face a penalty of up to 20% in the event that they seek to transfer (or realise) their pension benefits within 5 years of the initial investment being made (paragraph 4 of the statement of investment principles).

A breach of pensions legislation relating to employer related investments

  1. Section 40 PA95 provides that “The trustees or managers of an occupational pension scheme must secure that the scheme complies with any prescribed restrictions with respect to the proportion of its resources that may at any time be invested in, or in any description of, employer-related investments.”

  2. The Warning Notice sets out the statutory requirements for an investment to be classed as an employer related investment, summarised as follows.

  3. Pursuant to section 40(2) PA95 employer-related investments include “(a) shares or other securities issued by the employer or by any person who is connected with, or an associate of, the employer ...”

  4. Regulation 12(2) of the Investment Regulations provides that: “Subject to regulations 13 and 16, not more than five per cent of the current market value of  the resources of a scheme may at any time be invested in employer-related investments.”

  5. Section 249 of the Insolvency Act 1986 (IA86) sets out that a person is connected with a company if:

    1. he is a director or shadow director of the company or an associate of such a director or shadow director, or

    2. he is an associate of the company; and “associate” has the meaning given by section 435 in Part XVIII of this Act.

  6. Section 435(6) IA86 Act provides that companies can be an “associate” of one another in the following circumstances:

    1. if the same person has control of both, or a person has control of one and persons who are his associates, or he and persons who are his associates, have control of the other ...

  7. Further, section 435(10) IA86 states that:

    For the purposes of this section a person is to be taken as having control of a company if:

    1. the directors of the company or of another company which has control of it (or any of them) are accustomed to act in accordance with his directions or instructions, or

    2. he is entitled to exercise, or control the exercise of, one third or more of the voting power at any general meeting of the company or of another company which has control of it ...”

  8. Regulation 10 of the Investment Regulations provides that for the purposes of section 40 PA 95 the definition of “connected persons”, as defined in section 249 IA86, is modified “so that a company shall not be connected with another company solely by reason of one or more of its directors being a director of that other company.”

  9. Whilst the effect of Regulation 10 is that Manorcrest is not connected with Norton by reason only of having a common director, Mr Garner has control, within the meaning of section 435(10) IA86, of both Manorcrest and Norton. In particular Mr Garner has been the sole shareholder of Manorcrest from a time between 31 March 2016 and 6 April 2016. Prior to that, the sole share in Manorcrest was held by Argus (a nominee company) on behalf of Mr Garner, and he exercised and controlled the voting power attached to the sole share. Mr Garner has at all material times been the majority shareholder of the ordinary shares in Norton. In the case of both Manorcrest and Norton, Mr Garner has been entitled to exercise, or control the exercise of, one third or more of the voting power at any general meeting at all material times.

  10. The Case Team therefore submits that Manorcrest and Norton are associated companies by reason of the common control exercised over them by Mr Garner and that they have been associated since the incorporation of Manorcrest on 29 March 2012, pursuant to section 435(6) of IA86. As associates, Manorcrest and Norton are also connected companies, pursuant to section 249(b) of IA86.

  11. The Norton Preference Shares account for more than 5% of the Schemes’ assets. In fact they account for nearly 100% of the Schemes’ assets. In his email of 28 February 2018 to the Case Team Mr Garner confirmed that:-

    “The preference shares are the only investment the schemes have, this was always communicated to all members and everyone was aware it was a preference share investment in Norton.”

  12. The Case Team submits that the investments made in the Norton Preference Shares represent prohibited employer-related investments (and an undue risk to the members of the Schemes). An independent trustee, if appointed, will be able to review the situation and take steps to remedy the breach of the employer related investment legislation. This would safeguard the administration of the Schemes (section 7(3)(a)); secure the proper use and application of the Schemes’ assets (section 7(3)(c)); and protect the interests of the generality of the members of the Schemes (section 7(3)(d)). 

Poor governance

  1. The Warning Notice states that the Trustee has also failed to comply with certain statutory governance requirements including the following:-

    1. Failure to appoint a fund manager under section 47(2) of PA 95;

    2. Failure to obtain investment advice in accordance with section 36(3) of PA 95;

    3. Failure to appoint an auditor and obtain audited accounts

  2. The Case Team therefore argues that it is reasonable to appoint an independent trustee so that a person with the necessary knowledge and skill is in place to ensure that trustees comply with their statutory duties.

Lack of trustee knowledge and understanding

  1. In its Warning Notice the Case Team argues that the various failures by Mr Garner in acting whilst conflicted, making inappropriate (employer related) investments without proper investment advice and breaching scheme governance requirements demonstrates that he does not have sufficient knowledge and understanding of the law relating to pensions and trusts required of a trustee by section 247 of the Pensions Act 2004 (PA 04).

Grounds for exercising the power

  1. The Warning Notice summarises the grounds for asking the Panel to appoint an independent trustee on the basis that it is reasonable in order to:

    1. Secure the proper use or application of the assets of the Schemes and to protect the interests of the members of the Schemes (section 7(3)(c) and (d) of PA95) – in particular as regards the investment decisions;

    2. Secure that the trustees as a whole have, or exercise, the necessary knowledge and skill for the proper administration of the Schemes (section 7(3)(a) and (d) of PA95) – in particular taking account of the governance failures and the apparent lack of trustee knowledge and understanding.

  2. The Warning Notice also explains that the Case Team explored with Mr Garner the possibility of appointing an independent trustee on a voluntary basis. Although Mr Garner had informed the Case Team that he had identified Dalriada as a potential appointee in February 2018, that appointment has not taken place. Given the passage of time and the extent and nature of concerns regarding the current trustee, the Case Team considers it was left with no alternative but to seek an appointment under section 7 PA 95.

Representations

  1. On 11 April 2019 Mr Garner confirmed in response to the Warning Notice that he had “no objections and welcome[s] the positive step forwards”. Mr Garner made no further representations on the Warning Notice other than to state:- 

    “I would also like to state again that I was clearly used as a conduit by the convicted fraudsters that established the Schemes. They have long since disappeared leaving myself to hold everything together. I’ve done this to the best of my ability and acknowledge my failings. Moving on to a professional trustee can only be a positive step and I look forward to this.” 

  2. Whilst Mr Garner did not make further representations on the Warning Notice, it is clear from the preceding correspondence that Mr Garner does not accept a number of the allegations made by TPR including those in relation to his management of conflicts of interest and illegal employer related investments. The precise reasons why Mr Garner, who appears to have been in favour of the appointment of Dalriada for a considerable period of time, has not secured Dalriada’s appointment voluntarily remain unclear. The Warning Notice indicates that Dalriada has nevertheless begun due diligence work in respect of the Schemes.

The law

  1. There are two legal tests relevant to this matter. Since TPR’s jurisdiction to appoint a trustee is limited to occupational pension schemes established under a trust the first of these is whether the Schemes are “occupational pension schemes” within the meaning of section 1(1) Pension Schemes Act 1993.

  2. The second is the test under section 7(3) of PA 95 that is as to whether TPR is satisfied that the appointment of a trustee, is reasonable in order:

    1. “to secure that the trustees as a whole have, or exercise, the necessary knowledge and skill for the proper administration of the scheme,

    2. to secure that the number of trustees is sufficient for the proper administration of the scheme,

    3. to secure the proper use or application of the assets of the scheme, or

    4. otherwise to protect the interests of the generality of the members of the scheme

Reasons for decision

  1. In making its decision the Panel had regard to the objectives of the Regulator as set out in section 5 PA 04 and to the matters listed in section 100 PA 04.

  2. The Panel was satisfied that each of the Schemes was an occupational pension scheme. The Panel accepted the explanation given concerning the erroneous date of execution contained in the Donington Deed. The fact that the deeds for the other Schemes were executed in 2012 and that all three Schemes were registered with HMRC in 2012 taken together with Mr Garner’s explanation that the date used was based on a template (drafted in 2011) that had not been updated, made it reasonable to draw the inference that this was indeed a drafting error and that the true date of execution was subsequent to the incorporation of Manorcrest. The Panel therefore considered all three of the Schemes to be occupational pensions schemes and properly within the scope of TPR’s jurisdiction.

  3. The Panel was also satisfied that the five areas of concern advanced in the Warning Notice (and outlined above under the heading The Case Team’s Concerns) merited the appointment of an independent trustee. Each of those is addressed in turn.

Conflict of interest

  1. The Panel considered that there was evidence of a fundamental conflict of interest between Mr Garner’s role in securing the best interests of the Schemes’ beneficiaries and in promoting the success of Norton for the benefit of its shareholders (including himself). Mr Garner acknowledged this conflict in the Trustee Conflicts of Interest Statement and, in response to the Case Team’s investigation, he expressly accepted that this was clear to him from the outset.

  2. The Schemes’ Conflicts of Interest Policy, as well as TPR’s guidance, highlights that conflicts might arise where a trustee’s personal interests, for instance as a member of the scheme, conflict with the interests of the scheme beneficiaries and where a trustee owes duties to a third party which conflict with those owed to the scheme’s beneficiaries. The latter was precisely Mr Garner’s position: he alone decided to make and to maintain investments in Preference Shares issued by Norton, of which he was the majority shareholder and a company director.

  3. The Panel considered that Mr Garner’s appreciation of the dangers of acting under a conflict, and how to manage conflicts, was entirely inadequate. Moreover, Mr Garner’s failure to find and appoint a new trustee was indicative of a misunderstanding of conflicts and how to manage them. The conflict was most apparent at the time of setting up the Schemes, which seemed to have been set up primarily to invest in Norton, and when making the investments. The Conflicts of Interest Policy took effect from 28 June 2012 but neither that Policy (nor the inadequate steps taken in later years) could overcome the fundamental issue of the basis for the Schemes. The Panel agreed that it was therefore reasonable to appoint an independent trustee so as to secure the proper use or application of the assets of the Schemes and otherwise to protect the interests of the generality of the members of the Schemes.

Inappropriate investment decisions

  1. The Panel was satisfied that the decision to invest nearly all of the Schemes’ assets in the Norton Preference Shares was imprudent. The Panel considered that the singular nature of the investment generated unnecessary risks to members’ pension benefits with the underlying security of the investment resting entirely on the financial health of Norton. The Panel also considered this to be in breach of Regulation 7(2) of the Occupational Pension Schemes (Investment) Regulations 2005 (the Investment Regulations) requiring trustees to have regard to the need for diversification of investments.

  2. The Schemes’ own statements of investment principles made express reference to the need to make provision for appropriate liquidity and asserts that “Trustee recognised liquidity risk”. No such provision was made and the liquidity of the investments appears to be entirely dependent on Norton’s ability to pay.

  3. The Panel therefore agreed that the appointment of an independent trustee was reasonable to secure the proper use and application of the Schemes’ assets and, in particular, to ensure that investment decisions are made prudently and with due regard for the need to diversify the Schemes’ assets appropriately.

Employer related investments

  1. The Panel was satisfied that that the investment of nearly 100% of the Schemes’ assets in the Norton Preference Shares breached section 40(2) of PA95 and the prescriptions of the Investment Regulations. The effect of these is that investment in shares issued by a person connected or associated with the employer exceeding five per cent of the current market value of a scheme’s assets is unlawful.

  2. Given that since Manorcrest’s incorporation in March 2012, Mr Garner has demonstrably been entitled to exercise control or has controlled exercise over Manorcrest, and Norton, the Panel accepted that Norton and Manorcrest are associated and connected for the purposes of Section 40(2) of PA95. The Preference Shares in Norton represent the majority of the market value of the Schemes’ resources and well in excess of the 5% for employer related investments permitted under regulation 12(2) of the Investment Regulations.

  3. Again the Panel was satisfied that it was reasonable to appoint an independent trustee in order to ensure that the trustees have, and exercise the knowledge and skill to for the proper administration of the Schemes, including compliance with pensions legislation and to secure the proper use and application of the Schemes’ assets, and protect the generality of the Schemes’ members.

Poor governance

  1. The Panel agreed that Mr Garner had failed to:

    1. appoint a fund manager (as required by Section 47(2) of PA95);

    2. take advice in relation to investments (as required by Section 36(3) of PA95);

    3. appoint an auditor and obtain audited accounts (as required by Section 47(1) of PA95).

  2. The Panel noted that had a fund manager been appointed s/he would have been required to make breach of law reports to TPR concerning the conflict of interest, inappropriate investments and employer related investments. TPR might then have been able to take earlier remedial action. Furthermore, a fund manager would have appreciated that the Preference Shares presented an unnecessary risk to the Schemes’ members.

  3. As regards the investment advice, the Panel noted that Mr Garner has stated that he obtained advice orally concerning the Preference Share investments. He has, however, been unable to provide any documentary evidence of this or written confirmation of the advice itself. Moreover, section 36(7) PA 95 provides that “Trustees shall not be treated as having complied with subsection (3) or (4) unless the advice was given or has subsequently been confirmed in writing.”

  4. As regards the appointment of an auditor, Mr Garner has confirmed that since no accountant would accept the position, none has been appointed. Mr Garner has also stated that no audited accounts have been prepared in relation to the Schemes and has accepted that this is in breach of the legislation. Mr Garner has not, however, made any breach of law reports in connection with these (or any other) failures.

  5. In light of the above, the Panel considered it reasonable to appoint an independent trustee to ensure that a person with the necessary knowledge and skill is in place to ensure compliance with these and other statutory requirements.

Lack of knowledge and understanding

  1. The Panel was satisfied that Mr Garner did not have the requisite degree of knowledge and understanding of the law relating to pensions and trusts and of the principles relating to investment of scheme assets appropriate for his role as trustee (and as required by section 247 PA04). The failures of Mr Garner in acting while conflicted, making inappropriate and unlawful investments, and breaching scheme governance requirements all demonstrated to the Panel (both individually and in combination with each other) the lack of sufficient knowledge and understanding. Again the Panel considered that it was reasonable to appoint an independent trustee under section 7(3)(a). 

Trustee appointment

  1. Overall, for all the reasons outlined above, the Panel was satisfied that it was reasonable to appoint a new trustee in order:

    1. to secure that the trustees as a whole have, or exercise, the necessary knowledge and skill for the proper administration of the Schemes pursuant to section 7(3)(a) PA 95;

    2. to secure the proper use or application of the assets of the Schemes pursuant to section 7(3)(c) PA 95;

    3. otherwise to protect the interests of the generality of the members of the Schemes pursuant to section 7(3)(d) PA 95.

  2. The Warning Notice stated that Dalriada Trustees Limited is proposed as the independent trustee following a selection process. Dalriada indicated in correspondence to the Case Team dated 11 April 2019 that it would be content to accept the appointment if it were made. The Trustee raised no objections to the proposed independent trustee and the Panel had no objections. The Panel therefore accepted that Dalriada Trustees Limited be appointed as the independent trustee.

Consequential directions

  1. The Panel considered it appropriate that an order be made, pursuant to section 8(2) of PA 95, that the fees of the independent trustee be met out of the resources of the Schemes but that an amount equal to the amount paid be treated for all purposes as a debt due from Manorcrest, being the sponsoring employer of the Schemes.

  2. Finally it considered whether to order that the powers and duties exercisable by Dalriada Trustees Limited should be exercised to the exclusion of all other trustees, under section 8(4)(b) of PA 95, and whether to order the property of the Schemes to vest in Dalriada Trustees Limited as trustee of the Schemes under section 9 of PA 95.

  3. It decided it was appropriate in all the circumstances to make those orders. As stated above, the enduring conflicts of interest, inappropriate investments, poor governance and lack of knowledge and understanding were considered by the Panel to compel the appointment of an independent trustee able to act alone and without the agreement of the existing trustee.

Conclusion

  1. For the reasons outlined the Panel determined that an order should be made in the following terms:

    1. Dalriada Trustees Limited (the New Trustee) is hereby appointed as trustee of the Dominator 2012 Pension Scheme; the Commando 2012 Pension Scheme and the Donington MC Pension Schemes (the Schemes), with immediate effect.

    2. The order at (1) is made because the Pensions Regulator is satisfied that it is reasonable to do so pursuant to the relevant provisions of section 7(3) of the Pensions Act 1995 as set out below, in order:

      1. to secure that the trustees as a whole have, or exercise, the necessary knowledge and skill for the proper administration of the Schemes,

      2. to secure the proper use or application of the assets of the Schemes, and

      3. to protect the interests of the generality of the members of the Schemes

    3. The powers and duties exercisable by the New Trustee shall, until further order, be to the exclusion of all other trustees of the Schemes pursuant to Section 8(4)(b) of the Pensions Act 1995.

    4. The New Trustee’s fees and expenses in respect of the Schemes shall be paid out of the resources of the Schemes pursuant to section 8(1)(b) of the Pensions Act 1995 and an amount equal to the amount paid out of the resources of the Schemes by virtue of that section is to be treated for all purposes as a debt due from the employer (being Manorcrest Limited, the sponsoring employer of the Schemes) to the New Trustee of the Schemes, pursuant to section 8(2) of the Pensions Act 1995.

    5. To the extent that the New Trustee’s fees and expenses in relation to the Schemes are not met out of the Schemes’ resources under (4), above, the shortfall is to be paid to the New Trustee by the employer, pursuant to section 8(1)(a) and (c) of the Pensions Act 1995.

    6. Pursuant to Section 9 of the Pensions Act 1995, it is hereby ordered that all property and assets of the Schemes, heritable, moveable, real and personal, of every description and wherever situated and all rights pertaining to that property be vested in, assigned to and transferred to, the New Trustee as trustee of the Schemes.

    7. The appointment of the New Trustee may be terminated, or the New Trustee replaced, at the expiration of 28 days’ notice from the Pensions Regulator to the New Trustee, pursuant to Section 7(5)(c) of the Pensions Act 1995 and such power to terminate or replace the appointment shall be exercised by the Pensions Regulator in accordance with its delegation policy.”

  2. Appendix 1 to this Determination Notice contains important information about the rights to refer this decision to the Upper Tribunal.

Signed:

Chairman: Alasdair Smith

Dated: 21 May 2019 

Appendix 1

Referral to the Tax and Chancery Chamber of the Upper Tribunal

You have the right to refer the matter to which this Determination Notice relates to the Tax and Chancery Chamber of the Upper Tribunal (the Tribunal). You have 28 days from the date this Determination Notice is sent to you to refer the matter to the Tribunal or such other period as specified in the Tribunal rules or as the Tribunal may allow. A reference to the Tribunal is made by way of a written notice signed by you and filed with a copy of this Determination Notice. 

The Tribunal’s address is:

Upper Tribunal
(Tax and Chancery Chamber)
Fifth Floor
Rolls Building
Fetter Lane
London
EC4A 1NL

Tel: 020 7612 9700

The detailed procedures for making a reference to the Tribunal are contained in section 103 of PA 04 and the Tribunal Rules.

You should note that the Tribunal rules provide that at the same time as filing a reference notice with the Tribunal, you must send a copy of the reference notice to TPR. Any copy reference notice should be sent to:

Determinations Panel Support
The Pensions Regulator
Napier House
Trafalgar Place
Brighton
BN1 4DW

Tel: 01273 811852

A copy of the form for making a reference, FTC3 ‘Reference Notice (Financial Services)’, can be found on the GOV.UK website.

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