The bizarre pension liberation case in London’s High Court is expected to come to an end within weeks.
The Pensions Regulator (TPR) appointed pension trustees to argue the case that pension liberation is fraud and illegal before a judge in a bid to clarify the law.
Although the court previously found specific pension unlocking schemes illegal, the judgment fell short of giving a universal ruling for all such schemes.
TPR wants the practice declared illegal to aid the fight against alleged fraudsters luring retirement savers into transferring their funds into rogue pension schemes.
The attraction for savers is the schemes allow them to access their funds before the age of 55, the official minimum retirement age when pension schemes can pay out benefits.
Alleged fraud
TPR claims this is illegal and says pension savers lose significant amounts of their pension in fees to these rogue schemes – and in some cases, their cash is whisked offshore and lost in dodgy investment scams.
TPR barrister Jonathan Hilliard told the court that the schemes were not occupational pension schemes.
“The companies aren’t trading, there’s no continuing business, no employers in the scheme and no significant body of members,” he said.
Andrew Spink QC, appearing for Dalriada Trustees, which TPR appointed as the independent trustee for the bulk of the alleged pension liberation schemes involved, argued that the language describing the schemes when they were set up showed they were occupational pensions under European Union rules.
The High Court case started in July after raids and arrests by a joint task force set up by TPR, HMRC and the police.
TPR appointed independent trustees to several pension schemes suspected of running pension liberation operations.
Meanwhile, TPR and HM Revenue and Customs have put together a protocol for testing the legality of new pension schemes.
TPR has published a draft compliance and enforcement document for trust-based defined contribution pensions.
New pension law
The draft details how new pension schemes will be monitored, investigated and made to comply with trust-based defined contribution pension rules.
The draft will become law in November.
However, the new law is not retrospective and will not cover any suspected pension liberation schemes already running.
The High Court action is designed to fill the void by giving a clear guideline to the TPR and other regulators on how to deal with these existing pension unlocking schemes.
Several of the pension schemes involved in the case are related to Charles Conway, director of Motherwell-based IFA Future Financial Strategies and Conder Administration.
