Pension trustees of Dunnes Stores in Northern Ireland have been stopped from running its defined contribution (DC) scheme by The Pensions Regulator (TPR), following “a catalogue of governance failures”.
The watchdog appointed an independent trustee to protect savers working for the high street retailer, to oversee the Dunnes Stores (Bangor) Limited Management Pension Scheme. According to TPR, the acting trustees were found to “lack the knowledge and understanding to govern the scheme properly”.
This is the first time TPR has used its powers to appoint a trustee primarily because of lack of competence of the existing trustee board.
The decision was made by the regulator’s Determinations Panel because it was concerned the trustees’ failure to grasp their responsibilities was putting the benefits of its 390 DC scheme members at risk.
It found the employer nominated trustees had failed to engage properly with TPR and persistently failed to address a number of governance concerns raised by the watchdog despite assurances that they would.
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”.
It also said 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.
TPR executive director of frontline regulation Nicola Parish 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.”
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, TPR said.
The news is the latest example of TPR’s intention to be ‘clearer, quicker and tougher’. Also this month, the watchdog announced that employers who breach their automatic enrolment pension duties will be targeted with short-notice inspections.