A former owner of Norton Motorcycles has admitted illegally investing money into the business from three pension schemes for which he was the sole trustee.
Stuart James Garner, 53, of Park Lane, Castle Donington, Derby, pleaded guilty to three charges of breaching employer-related investment (ERI) rules by investing more than 5% of assets from each scheme into his business, Norton Motorcycle Holdings Ltd.
Derby Magistrates’ Court heard today (Monday) how the offences were in relation to three defined contribution schemes: Dominator 2012, Commando 2012 and Donington MC which had a total of 227 scheme members. The investments, which were made in return for preference shares, were made between 2012 and 2013.
Nicola Parish, Executive Director of Frontline Regulation at The Pensions Regulator, said: “As a trustee, Stuart Garner failed to comply with restrictions on investments which are designed to protect the funds of pension schemes. Trustees have a vital role in protecting the benefits of members and we will take action where that responsibility is abused.
Trustees should be clear on when a pension scheme can invest in its sponsoring employer.”
As set out in Regulation 12(2) of the Occupational Pension Schemes (Investment) Regulations 2005, subject to certain exceptions, it is a criminal offence to invest more than 5% of the current market value of scheme resources in ERIs.
Mr Garner is due to appear at 10am on 28 February at Derby Crown Court for sentencing.
Notes to editors
- The employer related investment (ERI) rules are set out in section 40 of the Pensions Act 1995 and in the Occupational Pension Schemes (Investment) Regulations 2005. Subject to certain exceptions, not more than 5% of the current market value of pension scheme assets may at any time be invested in ERI. ERI restrictions not only apply to investments in the employer, but also to investments in parties associated or connected with the employer, and in property used by the employer or its associates. A trustee who agrees to make ERI in breach of the restrictions may be subject to prosecution.
- The maximum penalty for a breach of ERI rules is an unlimited fine and/or a prison sentence of up to two years.
- TPR is the regulator of work-based pension schemes in the UK. Our statutory objectives are: to protect members’ benefits; to reduce the risk of calls on the Pension Protection Fund; to promote, and to improve understanding of, the good administration of work-based pension schemes; to maximise employer compliance with automatic enrolment duties; and to minimise any adverse impact on the sustainable growth of an employer (in relation to the exercise of the regulator’s functions under Part 3 of the Pensions Act 2004 only).
