The penalty, against Link Pension Trustees Limited in relation to failings on the McDonald’s Franchisee Pension Scheme, is the largest fine handed to trustees by The Pensions Regulator (TPR).
The scheme provides pensions for 32 franchisees of the fast food chain but is independent of McDonald’s.
Link Pension Trustees Limited was fined £73,750 by TPR’s independent Determinations Panel (DP) for: failing to obtain audited accounts for the scheme for four consecutive years; failing to provide members with Statutory Money Purchase Illustrations (SMPI) for two consecutive years; and failing to report those six breaches of law to TPR.
In its ruling the panel said: “The Panel would have expected better of a corporate professional trustee.”
In separate action arising from the same investigation the trustee of the master trust scheme was also fined £30,000 by TPR for failing to have at least three trustees on a master trust board.
TPR says the breaches were exposed through its engagement with all master trust schemes in preparation for authorisation and supervision.
It is the first time TPR has used enforcement powers for: failure to provide members with SMPIs; failure to report breaches of law to TPR; and failure to have three trustees on a master trust.
Nicola Parish, executive director of frontline regulation at TPR, said: “This case highlights how working more closely with master trusts as part of authorisation and supervision will expose any areas where the law is being broken and enable TPR to take action.
“The good governance of pension schemes is closely linked to good outcomes for members, so running a scheme well is essential to ensure pension savers receive the retirement they deserve.
“We will take action if the long-term protection of savings is put at risk.”
The trustee has resolved the breaches, paid the penalty and the scheme has triggered its exit from the master trust market.
In its ruling in relation to the £73,750 fine, the DP wrote: “Enforcing the obligation to obtain audited scheme accounts is an important way of ensuring member benefits are protected, as it should ensure the assets and liabilities of the scheme are made clear on an annual basis.”
It added: “While the breaches may not have caused identifiable financial detriment to members, they deprived members of information and a level of protection regarding their pension pots.”
The DP ruled that the level of fine was “proportionate to the significance, repetition and nature of the breaches and the harm caused and should send a strong message to the regulated community about the importance of statutory obligations”.