UK: Pensions Ombudsman Finds Pensions Trustees Personally Liable For Investment Losses
The Pensions Ombudsman has found two trustees personally liable to account for over £2.4 million of investment losses to a pension scheme. With exoneration clauses common in trust deed and rules, it is rare for trustees to be personally liable for breaches of duty. The facts are also unusual with the Scheme invested in high risk investments and it is unlikely to be a situation replicated often (if at all), but this case is a reminder that trustees cannot be exonerated for breaches of investment duties.
Fourteen members of the Henry Davison Limited Pension Scheme (the Scheme) had complained to the Pensions Ombudsman that the Trustees, Mr and Mrs Davison, had mismanaged to the Scheme’s funds. Unusually, the Pensions Ombudsman held an oral hearing before issuing his final determination.
The complaints centred on the Trustees decision in 2012 to invest £1.3 million in Tivan Fiducaries SA (Tivan), a Swiss based investment manager. Tivan was to invest the funds in contracts for difference with an aim of providing an investment return of 1% plus net per month. By February 2015, a loss of £1.2 million had been incurred, of which £1.1 million related to charges. Tivan went into liquidation in 2016.
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