Jurisdiction(s):
United Kingdom

Pensions Ombudsman: professional SSAS trustee 80% liable for speculative property investment; breached duties to obtain proper advice, diversify and monitor; member trustee 20% contributory fault

Published on: 07 May 2024

Published by a LexisNexis Pensions expert

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Article summary

Summary

The Pensions Ombudsman (PO) upheld a complaint, concluding that a professional trustee shared partial liability with the SSAS’s member trustee for a concentrated, high‑risk property investment taken on behalf of the Scheme. The professional trustee’s investment obligations were not limited by the scheme documents, and proceeding without advice and without diversification, in the circumstances, amounted to a breach of pension legislation. Nonetheless, the PO decided the member trustee bore 20% contributory responsibility for the loss suffered. The determination confirms that professional trustees are held to a stricter benchmark than lay trustees in comparable situations.

What were the facts?

Mr N was the only member of a small self‑administered scheme (the Scheme), set up after unregulated advice, via a transfer of £90,535.
He acted as a trustee with Rowanmoor Trustees Limited (RTL), a professional trustee.
Mr N signed an application and a property development schedule showing an intention to invest £62,500 in a hotel project.
RTL wrote to Mr N stating they were not opining on suitability and that he should obtain legal and financial advice.
Mr N did not obtain legal advice...

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