01 August 2008
The pensions ombudsman has made a landmark ruling that the
trustees of a pension scheme are personally liable for a loan made
to the sponsoring employer of their scheme.
In 2000, the scheme trustees of the Greenup and Thompson Limited
Pension Scheme authorised an unsecured loan of £150,000 to
the sponsoring employer, in spite of the fact that the employer was
in arrears on contributions and in poor financial health.
By September of the following year, the pension scheme went into
wind-up and the sponsoring employer entered voluntary liquidation.
An independent trustee was appointed, who brought the case to the
attention of the pensions ombudsman. The ombudsman ruled that the
scheme trustees (including member-nominated trustees) had committed
a breach of trust. They are now personally liable to pay
£130,000 back to the pension scheme.
