- TPR successfully prosecuted Stuart Garner for employer-related investment breaches, resulting in a suspended prison sentence being imposed.
- TPR’s independent determinations panel bans Stuart Garner from ever being a pension trustee again.
The Pensions Regulator (TPR) has today (Friday) published a report into regulatory and criminal action taken against a former pensions trustee who illegally invested schemes’ money into his business.
It also details how TPR acted to prohibit Stuart James Garner, 54, the former owner of Norton Motorcycles, from acting as a pension trustee again – a ban which came into effect last month [September].
The report explains how in March 2022 Garner, of Park Lane, Castle Donington, Derby was sentenced to eight months in prison, to run concurrently and suspended for two years, for each of three counts of breaching employer-related investment rules.
Derby Crown Court had heard how Garner left three pension schemes in his trusteeship, which were associated and connected with Norton Motorcycles, with a combined shortfall of £10 million.
During sentencing, Her Honour Judge Nirmal Shant, said Garner had been reckless and caused profound harm to his victims, both financially and to their mental wellbeing.
Nicola Parish, TPR’s Executive Director of Frontline Regulation said: “Our intervention report details how we and other agencies acted against Stuart Garner, including a successful prosecution for offences relating to serious breaches of pension investment duties.
“By taking money from schemes in his care to invest in his failing business, contrary to his duties as a trustee, Garner showed a lack of integrity, competence and capability. It is right he has now been banned from ever acting as a trustee again.
“Our focus remains on supporting the independent trustee in pursuing compensation for scheme members through the Fraud Compensation Fund.”
Garner was also disqualified from acting as a company director for three years, which also prevented him acting as a trustee during the period of disqualification and ordered to pay TPR’s costs of £20,716.
With the company director ban due to end in 2025, the report explains how TPR has now prohibited Garner from ever acting as a trustee again following a decision by TPR’s determination panel (DP).
The DP found Garner was not a fit and proper person to be a trustee of trust-based pensions schemes as he lacked the integrity, competence and capability to hold such a position.
The prohibition means it would be a criminal offence if he acted as a scheme trustee again.
Notes for editors
- A determination notice on the DP’s decision to prohibit Garner from acting as a trustee of trust schemes was also published by TPR today.
- Our Regulatory Intervention Report sets out that TPR prosecuted Garner for three ERI breaches when transferring nearly £11 million from Donington MC Pension Scheme, Dominator 2012 Pension Scheme and Commando 2012 Pension Scheme into Norton Motorcycles.
- And the report also explains the work of other agencies, including how:
- in June 2020, following a finding of maladministration, The Pensions Ombudsman (TPO) issued a payment order against Garner of £15.7 million (a sum factoring the schemes’ shortfall and additional factors, such as interest)
- independent trustees appointed by TPR pursued Garner for the £15.7 million TPO award, resulting in his personal bankruptcy
- insolvency practitioners for Norton Motorcycles continue to investigate how much money can be recovered for the schemes following the eventual liquidation of the companies
- the Fraud Compensation Fund has provided an “in principle” decision on eligibility to assist the independent trustees in submitting an eligible claim to the fund, on behalf of scheme members.
- The employer related investment (ERI) rules are set out in section 40 of the Pensions Act 1995 and in the Occupational Pension Schemes (Investment) Regulations 2005. Subject to certain exceptions, not more than 5% of the current market value of pension scheme assets may at any time be invested in ERI. ERI restrictions not only apply to investments in the employer, but also to investments in parties associated or connected with the employer, and in property used by the employer or its associates. A trustee who agrees to make ERI in breach of the restrictions may be subject to prosecution.
- TPR is the regulator of workplace trust-based pension schemes in the UK. Our statutory objectives are to:
- protect members’ benefits
- reduce the risk of calls on the Pension Protection Fund
- promote, and to improve understanding of, the good administration of work-based pension schemes
- maximise employer compliance with automatic enrolment duties
- minimise any adverse impact on the sustainable growth of an employer (in relation to the exercise of the regulator’s functions under Part 3 of the Pensions Act 2004 only)
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