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High Court Freezes Pension Reciprocation Scheme Assets

A High Court judge has issued a freezing order affecting over a million pounds of assets. Papers released by the High Court revealed that three related firms - Ark Business Consulting, Ark Commercial Pension Planning and Ark Commercial Retirement Planning - had been prevented by Mr Justice Henderson from moving around £1.08m from the country to Cyprus. The monies frozen relate to fees billed by the firms when a pension scheme member tries to "unlock" their monies while under age 55. The schemes claim to be able to circumvent minimum pension age rules by writing loans (of up to 50% of the pension scheme funds) to members instead of paying pension benefits.

The law firm McGrigors is acting on behalf of Dalriada Trustees and their pensions partner Ian Gordon said: "Many of these so-called unlocking schemes test the boundaries of what is legal and effective, and everyone should be made fully aware of the risks. The types of organisations who typically market schemes of this nature are often registered abroad and as such are not regulated by the FSA. We would advise anyone who is approached with an 'unlocking' or reciprocation proposition to proceed with the utmost caution. Some press reports have indicated that pensions reciprocation agreements are marketed as a means to free up investment for capital in overseas real estate ventures, and that type of arrangement should sound alarm bells."

A Dalriada Trustees spokesman added: "We believe that schemes of this sort have been marketed to people who, through no fault of their own, have not fully understood their import and who do not realise that they could potentially be putting a substantial proportion of their pensions savings at risk."

At the end of May The Pensions Regulator appointed an independent trustee firm - Dalriada Trustees Limited - for six firms offering pension reciprocation plans. The schemes concerned are:

  • Cranborne Star Pension Scheme
  • Grosvenor Parade Pension Scheme
  • Tallton Place Pension Scheme
  • The Lancaster Pension Scheme
  • The Portman Pension Scheme
  • Woodcroft House Pension Scheme

A Dalriada press release has details of the schemes involved as a well as a FAQ and contact number for concerned members.

The Pensions Regulator and the Financial Services Authority also issued warnings about such schemes last month:

TPAS - Regulators Issue Warning on Pension Loan Schemes