The pension regulator (TPR) and the pension protection fund (PPF) have been asked to clarify the circumstances under which savers can receive compensation, in a letter from the Chairman of the Work and Pensions Committee (WPC), Stephen Timms.
The letter acknowledged that the High Court’s decision in PPF Board of Directors vs Dalriada meant that many members of pension plans used as a vehicle for pension fraud could now be eligible for compensation, but added that there was additional uncertainty around cases, such as Salmon Enterprises, where no independent director was ‘had been named.
As such, Timms asked the two organizations whether systems without a trustee and without identifiable assets continued to exist as entities that can make a claim against the Fraud Compensation Fund (FCF).
He also asked whether TPR would reconsider any decision not to appoint independent directors for programs that might now be eligible for FCF compensation, as well as whether the PPF would engage in programs that might be eligible for FCF compensation. FCF, but did not have trustees.
Finally, the letter asked whether the PPF had included trustee-free schemes in its estimated £ 350million in compensation to be claimed following the High Court judgment.
A judgment in the case was handed down in November 2020, as Judge Trower determined that a significant number of pension plans could, in principle, make claims to the CLF.
Pension Scams Industry Group (PSIG) chairman Margaret Snowdon warned the decision could have “a huge impact on pension release cases”.