The Pensions Regulator has fined four trustees of the Salvus Master Trust for failing to invest £1.4m of member funds.
The trustees each received the maximum fine of £5,000.
The regulator says more than 9,000 members were affected by this issue, and did not see their contributions invested for three years.
TPR says this was a breach of regulation 24 which requires trustees to process and invest contributions from employers promptly and accurately. This was the first TPR penalty for such a breach.
Salvus’ trustees reported the problem to TPR when it came to light, along with a plan to rectify this problem and address the historic administration problems which led to the breach.
All members were returned to the financial position they would have been in if this error had not occurred.
TPR executive director of frontline regulation Nicola Parish (pictured above) says: “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.
“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.”
Salvus Master Trust founder Steve Goddard says: “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.”
Michael Clark chair of Salvus Master Trust trustees adds: “As soon as the trustees became aware of the unallocated contributions we alerted TPR.
“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.”
Parish adds that new legislation for master trusts came into force on 1 October which puts safeguards around these schemes to better protect members.
She says: “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 which do not meet their legal duties.”