Monday 21 October 2013
Pensions Liberation: Schemes may be OPSs
Suspected pensions liberation schemes declared to be occupational pension schemes, despite evidence that they were not run as such
Judgment has been given in 2 test cases relating to pensions liberation. Jonathan Hilliard and Bobby Friedman acted for the Pensions Regulator in both cases, Jonathan Evans QC acted for the independent trustee in one case and James Walmsley attended on behalf of the Financial Conduct Authority. Morgan J gave judgment declaring a number of pension schemes suspected of involvement in pensions liberation to be occupational pension schemes within the relevant statutory definition.
Pensions liberation involves the establishment of a pension scheme on the basis that it is an occupational pension scheme and the registration of the scheme as such with HMRC and the Pensions Regulator. The scheme is then used to attract people to transfer their pension savings into it. Money is then improperly paid out of the scheme to members at times and in amounts that is not consistent with its status as a registered occupational scheme.
In the test cases, the Pensions Regulator argued that the schemes did not qualify as occupational pension schemes for the purposes of the pensions legislation. That issue has a significant impact on the regulatory, fiscal and pensions legislation that applies to such schemes. Morgan J left open the question of whether the schemes were shams but rejected TPR’s other arguments and held that (assuming that the schemes were not shams) the schemes in question in the test cases were occupational pension schemes.