Pension trustees at well-known high street retailer Dunnes Stores in Northern Ireland have been stopped from running the company’s defined contribution (DC) scheme following a catalogue of governance failures.
To protect savers, an independent trustee has now been appointed by The Pensions Regulator (TPR) to oversee the Dunnes Stores (Bangor) Limited Management Pension Scheme. The acting trustees were found to lack the knowledge and understanding to govern the scheme properly.
The decision was made by TPR’s Determinations Panel because it was concerned the trustees’ failure to grasp their responsibilities was putting the benefits of 390 DC scheme members at risk.
This is the first time TPR has used its power to appoint a trustee primarily because of a lack of competence of the existing trustee board.
Nicola Parish, TPR’s Executive Director of Frontline Regulation, said: “We will not stand by when trustee incompetence threatens the retirement outcomes of workplace pension savers.
“In this case, the trustees put member outcomes at risk and so we took action to ensure benefits are protected. The trustees have been replaced because they have consistently failed to show they had the skill to do the job properly.
“Trustees who are not committed to their duties should consider whether it’s right that they continue in their position of being responsible for governing a pension scheme.”
After an investigation by the TPR case team into a series of governance issues, the case was referred to the Determinations Panel. The employer nominated trustees had failed to engage properly with TPR and persistently failed to address a number of governance concerns raised by TPR despite assurances that they would.
The Panel found that despite more than a decade of being responsible for running the scheme, the employer nominated trustees had failed to “familiarise themselves with the requirements of UK pensions legislation.” The trustees showed “that they do not have, or are not exercising, their knowledge and understanding for the proper administration of the scheme” which led to a series of governance errors with little attempt to rectify them.
The independent trustee of the DC scheme is now in the process of considering the future of the scheme as to the best way to protect member benefits. Members will be kept informed on the future of the scheme.
Notes for editors
- TPR is the regulator of work-based pension schemes in the UK. Our statutory objectives are: to protect members’ benefits; to reduce the risk of calls on the Pension Protection Fund (PPF); to promote, and to improve understanding of, the good administration of work-based pension schemes; to maximise employer compliance with automatic enrolment duties; and to minimise any adverse impact on the sustainable growth of an employer (in relation to the exercise of TPR’s functions under Part 3 of the Pensions Act 2004 only).
- The Determinations Panel (DP) is a statutory committee of TPR. It operates separately from other parts of the organisation, including TPR’s case teams. The DP has a separately appointed membership and legal support. This enables it to make independent and impartial decisions on behalf of TPR. The DP considers all the evidence before it and provides each party with reasonable opportunity to present their case. The Panel are independent of the case teams and are not involved in the investigation process.