THIS IS VERSION 1 OF THIS DOCUMENT – ISSUED BY DALRIADA TRUSTEES LIMITED. FREQUENTLY ASKED QUESTIONS WILL BE ADDED HERE FROM TIME TO TIME AS THEY ARE IDENTIFIED – PLEASE CHECK BACK FOR UPDATES. THIS DOCUMENT MAY BE FREELY CIRCULATED OR REPRODUCED IN ITS ENTIRETY BUT DALRIADA TRUSTEES LIMITED MUST BE ACKNOWLEDGED AS THE SOURCE OF THIS DOCUMENT. WE WOULD APPRECIATE THAT WHEN CIRCULATING ELECTRONICALLY OR OTHERWISE THAT A LINK TO www.dalriadatrustees.co.uk/milton IS SHOWN SO THAT READERS CAN EASILY ACCESS THE LATEST VERSION.
This Frequently Asked Questions (FAQs) document relates to the following pension schemes (the Schemes):
Binnian Cedar Retirement Benefit Scheme
Bodmin Stincher Retirement Benefit Scheme
Ochil Birch Retirement Benefit Scheme
Sidlaw Larch Retirement Benefit Scheme
Lawers Tay Retirement Benefit Scheme
Quantock Yew Retirement Benefit Scheme
Dalriada has made documents available for download by members.
Click on the relevant Scheme name above to see the documents available for download.
Copies of all Announcements issued to date can be downloaded from the links below:
1st Announcement – July 2013
2nd Announcement – August 2014
3rd Announcement – March 2015
4th Announcement – May 2015
5th Announcement – October 2015
6th Announcement – June 2017
7th Announcement – June 2018
Frequently Asked Questions
FREQUENTLY ASKED QUESTIONS WILL BE ADDED HERE FROM TIME TO TIME AS THEY ARE IDENTIFIED – PLEASE CHECK BACK FOR UPDATES.
Q Why and When was Dalriada Trustees Limited (Dalriada) appointed?
Dalriada was appointed by the Pensions Regulator as independent trustee on 13 June 2013.
The Pensions Regulator had concerns that the Schemes were being used as vehicles for ‘pension liberation’. Pensions liberation occurs where individuals are encouraged to transfer to new schemes in the expectation of getting early access to their pension fund (before the minimum retirement age of 55), either by way of a loan or some other form of cash inducement.
Such payments are in breach of the Regulations that govern occupational pension schemes and can expose members to potentially significant tax charges.
Dalriada was given exclusive powers to the Schemes which means that all trustee powers and rights are now held by Dalriada.
Due to the nature of the Schemes, there was some uncertainty about whether or not they were occupational pension schemes. As the Pensions Regulator can only appoint trustees to occupational pension schemes, this might have meant Dalriada’s appointment was not valid.
Dalriada made an application to the High Court (in respect of a different set of schemes but with similar documentation) to determine whether or not these schemes were occupational schemes. At the same time it sought to have the Court confirm Dalriada’s appointment to the Schemes using the Court’s own powers, which it did by way of an Order of the Court dated 19 June 2013.
The application to determine whether or not the schemes were occupational pension schemes was heard either side of the Court’s summer break in July and October 2013. In his judgment handed down on 21 October 2013, Mr Justice Morgan determined that the schemes in question were occupational pension schemes.
This meant that the actions taken by the Pensions Regulator to appoint Dalriada were valid.
Q Are the pension schemes’ assets safe?
Dalriada has obtained control of the schemes’ bank accounts.
With regard to the other investments made by the Schemes, the position is as follows.
Dalriada has been working to gain control of the investments made by the previous trustees. Dalriada has established that around £11.4m was transferred into the Schemes by way of individual member transfer payments. The majority of that money (£7.7m) was paid over to Advalorem Value Asset Fund Limited, a Gibraltar based investment company.
£1.1m was paid to Swan Holding PCC Limited (Swan Holding), a company based in the Isle of Man.
Of the remainder, about £350,000 was paid in fees to the previous trustees and their advisers, a further £280,000 was paid out in benefits.
The balance, £1.9m, was held in cash.
Advalorem Value Asset Fund Limited
On 27 January 2014, following investigations, the Financial Services Commission (FSC) in Gibraltar obtained an order appointing Chantrey Vellacott (a firm of Chartered Accountants) as administrator of Advalorem. The Schemes were the only investor in Advalorem and Dalriada and its legal advisers are in communication with Chantrey Vellacott to decide what action should be taken. We know that the majority of the money (£6.6m) was used to buy land in Scotland, land that would appear to be worth significantly less than the amount paid for it.
Swan Holding PCC Limited
The Schemes have bought shares in a ‘sub-fund’ of Swan Holding (called ‘Cell A’). The purpose of this fund is to invest in UK commercial and residential properties and land. Dalriada has been advised by Swan that investments can be both direct (buying property and land) and indirect (making loans, investing in property companies or entering into joint ventures or partnerships). Dalriada has also been advised that the anticipated return is 6-9% per year however it is unlikely that this return will be paid annually and it will most likely be rolled forward each year. The shares are non redeemable and the life of the fund is at least ten years. This means that this investment is ‘highly illiquid’, in other words it cannot be ‘cashed in’. Dalriada is trying to find out when it will be able to get funds back into the Schemes, and, at that time, what the investment is likely to be worth, if anything.
Dalriada considers both these investments high risk and inappropriate, particularly given the fact that the majority of the Schemes’ funds have been placed in just two investments. There are concerns that the investments might have little or no value ultimately which will impact greatly on the value of members’ benefits.
Q Will the value of my pension fund be reduced?
Until Dalriada can determine the value of the Schemes’ assets, it will not be able to give members an indication of the value of their benefits under the Schemes. However, as set out above, it is likely the realised value of the Schemes’ investments will be materially less than the amount invested. This would mean that members’ funds would be reduced.
In our first Announcement we explained that the Pensions Regulator had concerns that the Schemes had been used for pension liberation. If members have received a cash payment as a result of joining one of the Schemes, HMRC may find these to be ‘unauthorised payments’. If that is the case there is a possibility that the Schemes themselves may be subject to tax penalties. If so, this will reduce the remaining funds held in the Schemes and therefore, ultimately, member benefits.
Any costs that are incurred (see below under ‘What costs are being taken?’) will be taken from Scheme funds and will accordingly reduce the amount of members’ funds.
Q What actions have you taken and what actions are you taking?
Dalriada has received copies of the member files that were seized by City of London Police from the previous administrators. Based on those records we have now created proper administration records on our computer systems.
As well as taking control of the Schemes’ bank accounts, Dalriada has also obtained copy bank statements for the Schemes. These have been reconciled against the member files and we have now created the necessary accounting and financial records that will enable us to prepare annual Report and Accounts for the Schemes as we are required to do under pensions law.
In conjunction with our legal advisors we have been actively pursuing recovery of the investments. Given the nature of the investments this is proving to be a long and difficult process.
We have prepared announcements for members and a centralised website with FAQ’s. These will be updated on a regular basis.
We are in contact with HMRC regarding the tax position concerning the Schemes and keep the Pensions Regulator regularly updated on progress.
Dalriada is continuing to get as much information as it can regards all aspects of the Schemes.
Q What costs are being taken?
Usually, where a scheme is an occupational scheme, some, if not all, of the costs of running the scheme would be met by the employer. The employers linked to the Schemes do not appear to have ever actively traded nor do they appear to have any assets or means to contribute to the costs of running the Schemes. This means that the costs of the previous trustees and its administrators and advisers, as well as Dalriada’s costs and legal costs, have been, and will continue to be, met from the Schemes’ funds.
Whilst Dalriada will do all it can to minimise costs, because of the number of complex issues associated with these types of scheme, not least the work involved in setting up proper administration records and trying to identify and recover investments, costs will be significant and will impact on the value of the Schemes’ funds.
Q What is the value of my pension fund and when can I take my benefits?
As commented above, until
- the realised value of the investments is known,
- the tax position is clarified,
- the final costs are known, and
- we know how the costs and losses are to be apportioned between the Schemes and members
Dalriada is not able to value members’ funds. To explain further:
- Ultimately, Dalriada might require direction from the Court as to how to apportion any remaining assets of the Schemes (taking into account any losses suffered by the investments and costs, including any tax charges) between members.
- The Trustee can only allow benefits to be taken once it knows the correct value of the fund for each member. Therefore we cannot agree to any benefits being taken at this point and it may be some time before we are able to do so.
Q Can I transfer out of the Schemes to another registered pension scheme or take my benefits?
Until Dalriada can place a value on the members’ funds it will be unable to pay out any transfer values. It may be many months before any transfer values can be paid out. Similarly, and as mentioned above, we cannot agree to any type of benefits being taken at this point.
Q I feel that I have been wrongly advised to transfer into a scheme. Who should I complain to?
Dalriada’s role as Independent Trustee is to manage the Schemes in the best interests of their members. If any member feels that they were wrongly advised to transfer into a scheme then Dalriada cannot assist with this complaint. You should immediately contact the firm that provided the advice.
If a member has a complaint about any action taken by Dalriada then you should complain in the first instance to Dalriada.
You may also find it helpful to read our page about the regulation of pension schemes. If you wish to speak to someone independent of Dalriada, The Pensions Advisory Service provides a free independent source of advice.
Q What should I do if I have any further questions?
If you are a member of one of the Schemes and have a personal question please contact Dalriada in one of the following ways:
By telephoning our helpline for members
Dalriada Trustees Limited
27-37 Adelaide Street
By e-mailing email@example.com
By using the Get in Touch form on our website.