TPR fines Salvus trustees £5,000 over non-investment of £1.4m in pension contributions


Four trustees of Salvus Master Trust have been fined a total of £5,000 by The Pensions Regulator (TPR) for failing to promptly invest members’ savings for three years.

A master trust is an occupational pension scheme that provides money purchase benefits for multiple, unconnected employers. The trustees were in breach of regulation 24 of the Occupational Pension Schemes (Scheme Administration) Regulations 1996, which legislates for the prompt and accurate processing and investment of contributions from employers.

Contributions received since 2014, totalling £1.4 million from 9,081 members, were affected by the breach by Gowling WLG Trust Corporation, Able Governance, Clark Benefit Consulting and Steve Rumbles. This was TPR’s first penalty issued following such a breach, and the maximum possible fine was imposed.

Nicola Parish, executive director of frontline regulation at TPR, said: “Pension schemes must collect and invest the contributions made by employers and employees. To have left so much money uninvested for this period of time is clearly unacceptable.”

Savlus’ trustees reported the problem to TPR in January 2017, stating that it arose due to issues with the manual processes for allocating contributions, and provided a plan to rectify the failure to invest pension contributions and address the historical administration problems which led to the breach.

Michael Clark, chair of Salvus Master Trust Trustees, explained: “As soon as the trustees became aware of the unallocated contributions issue we alerted TPR and provided them with our robust plan of action to rectify the situation. The Trustees worked closely with the administrators and Goddard Perry, kept to our plan and regularly updated TPR with progress reports. The Trustees were delighted with the support and action provided by Goddard Perry, which ensured that no member suffered any detriment, which was always at the forefront of our minds. Our decision to move away from manual reconciliation of pension contributions and payments by BACS to an automated process gives the trustees confidence that this problem cannot reoccur.”

In September 2017, TPR issued a penalty notice to the trustees of the scheme who were in place between 6 April 2015, when the regulation requiring trustees to process core financial transactions promptly and accurately came into force, and 17 October 2016, after which point TPR deemed that any new trustee would not have had enough time to take action.

Parish said: “Our engagement with Salvus has ensured that not only the thousands of members affected have not suffered any detriment, but also the master trust’s systems have been improved to stop this happening again.”

She added: “New legislation for master trusts came into force on 1 October that puts safeguards around these schemes to better protect members. Master trusts have to prove that they meet standards in five areas, including proving that they have adequate systems and processes. We will continue to take tough action against schemes that do not meet their legal duties.”

Steve Goddard, founder, Salvus Master Trust said: “Since this incident occurred we have revolutionised our digital operations and automated our processes to make sure that situations such as this cannot re-occur. As soon as we were aware of the systems error which led to the backlog we immediately brought this to TPR’s attention, along with a proactive plan that ensured no members have lost out. Today our robust online processes ensure that once employers load data into our system, contributions are collected and invested automatically.”