A pension liberation company that raided £3.3 million of retirement savings was wound up in the High Court this week.
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Thames Trustees managed the Westminster Pension Scheme, which offered 79 retirement savers cash of up to 50% of the value of their funds.
The money was a loan or commission from investments made by Thames Trustees, but no arrangements were needed to repay the money.
The savers were all under 55 years old, so could not take money from their pensions without paying tax penalties starting at 55% of the value of their fund.
Failed Florida property investment
However, an Insolvency Service investigation revealed this was not explained to the pension scheme members.
The High Court found that the trustees ran the pension scheme with a lack of transparency and commercial probity and agreed to wind the company up in the public interest.
The judge heard that the directors had no knowledge about how the company was run and the value of any investments.
The investigation disclosed ‘significant sums’ were deducted from the transferred pension funds to pay commissions and charges relating to the transfer that had not been explained to clients.
Some money was invested in a failed property development in Florida, USA, which was risky and unsuitable for many of the pension investors. The land is now considered worthless.
Lack of co-operation with investigation
Colin Cronin, an investigation supervisor with the Insolvency Service, said: “The structure of this pension liberation scheme was deliberately opaque and the lack of transparency was added to by the failure of those in control of the company to fully cooperate with the investigation.
“The operation of the scheme was highly prejudicial to the clients who were required to invest their pension funds into it in order to obtain the early release of part of those funds. The balance of funds was not legitimately invested as clients were led to believe. These proceedings show that the Insolvency Service will take firm action against companies which mislead the public in this way.”
Thames Trustees was formed in October 2012 and was based at an accommodation address in Victoria, London, until March 2015, when the office was moved to Preston, Lancashire.
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