London Quantum Retirement Benefit Scheme

Dalriada was appointed by the Pensions Regulator as independent trustee to the London Quantum Retirement Benefit Scheme (the “Scheme”) on 18 June 2015.

Dalriada was given exclusive powers to the Scheme which means that all trustee powers and rights are now held by Dalriada.

The decision to appoint Dalriada was subject to a compulsory review by the Determinations Panel of the Pension Regulator.  Following this review the Panel issued a final notice on 8 February 2016 that confirmed their original decision to appoint Dalriada Trustees Limited as [independent] trustee of the Scheme. None of the affected parties appealed this decision therefore Dalriada’s appointment is confirmed.

Dorrixo Alliance (UK) Limited (“Dorrixo”) is still a Trustee. However, it cannot exercise any powers in relation to the Scheme. All contact between members and the Scheme should be through Dalriada.

Dorrixo have applied to Companies House for voluntary strike off.  Dalriada have objected to that application and the strike off has been suspended.

Dalriada believe that actions taken by Dorrixo may have been in breach of trust.  If it transpires that the members have suffered a loss as a result then we wish to reserve the Scheme’s position to take action against Dorrixo for the benefit of the members.

Dalriada has obtained control of the Scheme’s bank accounts. Until recently these accounts were frozen by the banks (Metro Bank and Lloyds Bank).

We have been undertaking a considerable amount of work to understand the Scheme’s investments, in particular:

• Why they were chosen,
  • What the contractual position is,
  • What the value is,
  • Whether each investment can be easily cashed in.

After a review of the investments by an independent investment adviser, it was concluded that they are not appropriate for this type of scheme. The advice received was that alternative investments should be sought where possible. We have written to the investment providers asking them to tell us if it is possible to ‘cash in’ the investments immediately and, if so, how much the Scheme would receive. This will allow us to decide which investments this might be an appropriate course of action for and those where it would not be appropriate to do so.  We cannot make this decision unilaterally and we are in the process of appointing an investment adviser to the Scheme to advise on what action we should take.  This will include what replacement investment(s) should be made for the future.

Until Dalriada can determine the value of the Scheme’s assets, it will not be able to give members an indication of the value of their benefits under the Scheme. Any costs that are incurred (see below under ‘What costs are being taken?’) will be taken from the Scheme’s funds.

Since our appointment Dalriada has been undertaking all the activities of a trustee of an occupational pension scheme.  The nature of the  appointment and review process has also meant considerable extra work.  Our work to date has included the following

• Initial take on work, gathering in records (paper and electronic). Create proper administration records on our computer systems.
• Participate in compulsory review process. Make submissions to the Regulator, receive and respond to numerous sets of representations from other parties, prepare for and attend a full day oral hearing before the Determinations Panel of the Pensions Regulator.
• Analysis of investments (including legal analysis of contractual documents) and significant amount of contact with investment providers.
• Preparatory work for provision of audited accounts.
• Governance analysis and review to identify where there is compliance, where there are failings and plans to rectify these.
• Held formal Trustee meeting.
• Regular announcements issued to members.
• Liaison with liquidators for Quantum.

We have appointed an auditor.

We appointed an investment adviser to give us advice in relation to the appropriateness of the investments and to allow us to respond to the Regulator’s Compulsory Review process.  We are in the process of appointing an investment adviser to provide us with ongoing advice.

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. Under the terms of the Order appointing Dalriada, costs should be met by the Sponsoring Employer, Quantum Investment Management Solutions LLP failing which they will be met by the Scheme.  We were advised at the end of February 2016 that Quantum had applied for Creditors Voluntary Liquidation on the grounds that it was insolvent.  At a creditor’s meeting on 3rd March 2016 the liquidation was confirmed and Duff & Phelps Limited was appointed as liquidator. The liquidator has confirmed that Quantum has very little by way of assets, which means that it is unlikely to be able to meet its obligations under the Order.

Whilst Dalriada will do all it can to minimise costs, because of the number of complex issues, as set out above, associated with this scheme, not least the work involved in setting up proper administration records and trying to identify and value investments, costs will be significant and may impact on the value of the Scheme’s funds.

As commented above, Dalriada is not in a position to value members’ funds until:

• the realisable value of the investments is known,
• the final costs are known, and
• we know how the costs and any investment losses are to be apportioned between the Scheme and members.

Ultimately, Dalriada might require direction from the Court as to how to apportion the assets of the Scheme (taking into account any losses suffered or gains made by the investments and also the costs of running the Scheme) between members.

The Trustee can only allow benefits to be taken once it knows the correct value of the fund for each member.

The Scheme has been set up in such a way that every member has a ‘personal account’ to which specific investments are allocated.  Additionally, from the information we received from the previous trustee, there are discrepancies in the way investments have been split across members that we are in the process of trying to resolve.

This system of ‘personal accounts’ is causing administrative problems with allocating the costs of the Scheme and, due to the illiquid nature of the investments, is causing problems when the Scheme is required to provide pension benefits, death benefits, transfers or cash lump sums.

As costs have to be allocated to the Scheme given Quantum’s liquidation we need a Court direction on how to do this.  To save costs to the Scheme and the members we hope to rely on an analogous case that is being heard on another of our appointments.  That is unlikely to be concluded before January 2017.

Taking all this into account, we cannot agree to any benefits being taken at this point and it may be some time before we are able to do so.

Not at the moment – the cost allocation reason applies.

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.

Dalriada’s role as Independent Trustee is to manage the Scheme in the best interests of their members. If any member feels that they were wrongly advised to transfer into the scheme then Dalriada cannot assist with this complaint. You should immediately contact the firm that provided the advice.

You can get free advice from organisations like the Citizens Advice Bureau or see the Money Advice Service’s tips on making a complaint.

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.

If you wish to find out more about pension scams in general further information is available from the Pensions Regulator and the Financial Conduct Authority.

If you are a member of the Scheme and have a personal question please contact Dalriada in one of the following ways:

By telephoning our helpline for members:
02890 412009

By Post:
Dalriada Trustees Limited
Linen Loft
27-37 Adelaide Street
Belfast
BT2 8FE

By e-mailing londonquantum@dalriadatrustees.co.uk

By using the Get in Touch form on our website.