Pensions unlike other areas of society, are regulated openly and in good faith.
The Pensions Regulator engages with this blog and sometimes gets in touch to add information or correct errors on my part.
It is my happy duty to follow on from my recent blog on the Worthington pension scheme with the following points, raised by TPR.
My blog asked why prosecutions against Derek Thomas and David Boardman didn’t proceed, assumed the Worthington Pension Scheme is in the PPF and stated that for the damage done, a one year suspended sentence didn’t look like much of a deterrent.
Jane Wolstenholme has pointed out in “comments”, that I was wrong to assume the scheme is in the PPF, a point reiterated by TPR
That the scheme is defined contribution makes the loss to the members even more real. Rather than a PPF haircut, they have had the £700,000 removed from their pots. I’d be interested to know what they are getting out of this prosecution.
This direct loss makes the suspended sentence and community order against Stephen Smith, even more disappointing.
Below is a mail I have received from TPR asking for me to update readers on the full situation over its recent proceedings and to correct my mistaken assumption that the money had been stolen out of a DB fund – not the member’s own pots. It is unexpergated.
Further to your recent blog, So what does a trustee have to do to go to jail? | AgeWage: Making your money work as hard as you do (henrytapper.com), we felt it would be helpful to address some of the points you make.
Derek Thomas:
Mr Thomas was charged with four counts of assisting or encouraging prohibited loans. He passed away during the course of proceedings and the case against him was withdrawn. We were due to offer no evidence against him in any event due to the deterioration in his health which meant he was not fit to stand trial.
David Boardman:
Our prosecution decisions are taken in accordance with the Code for Crown Prosecutors and, in accordance with the code, we regularly review those decisions to ensure there remains a realistic prospect of securing a conviction and that prosecution remains in the public interest. Having undertaken a review, following changes to the evidence available, we were no longer satisfied that the case against Mr Boardman satisfied the evidential test and it was withdrawn.
Sentencing:
Sentencing decisions are entirely a matter for the court. As the prosecuting authority in this case against Stephen Smith, and in all cases we bring, we presented the facts and assisted the judge with any applicable Sentencing Council guidelines or previous case law authorities. In this case the Judge viewed Mr Smith’s culpability as someone who played a significant role, not a leading role, and whose acts were negligent not reckless. The harm was assessed as undermining the public’s confidence in pension saving generally. All of the loans which Smith pleaded guilty to were repaid.
The court took the view that the case passed the custody threshold i.e. it was so serious that neither a fine alone nor a community sentence can be justified for the offence. The maximum sentence for this offence is 24 months’ imprisonment and the Judge stated that had Mr Smith been convicted following a trial he would have received a sentence of 15 months. This tariff was reduced by one third to ten months due to him having pleaded guilty at the earliest opportunity.
The sentencing guidelines provide that “When an offender is given a custodial sentence of between 14 days and two years (or six months in the magistrates’ court), the judge or magistrates may choose to suspend the sentence for up to two years. This means that the offender does not go to prison immediately but is given the chance to stay out of trouble and comply with up to 13 requirements set by the court.”
The Judge took the view that there was an obvious realistic prospect of rehabilitation in Mr Smith’s case and noted his status as a person with family responsibilities. He was therefore able to suspend the sentence for a period of 12 months. If Mr Smith reoffends in that period, then the suspended sentence will be activated. He was also asked to undertake 150 hours unpaid work in the community.
PPF:
The Worthington Employee Pension Scheme is a defined contribution arrangement and therefore not eligible to be taken over by the PPF.
