A B Produce PLC (SSAS) Retirement Benefits Scheme - Determination notice

Standard Procedure Determination Notice under sections 10(2)(b) and 96(2)(d) of the Pensions Act 2004 and section 7(3) of the Pensions Act 1995

A B Produce PLC (SSAS) Retirement Benefits Scheme (the Scheme)

The Pensions Regulator case ref: C177366199

By a request dated 25 March 2022 (the Request) the case team (the Case Team) of The Pensions Regulator (TPR) asked the Determinations Panel (the Panel) of TPR to consider the issues in a Warning Notice dated 28 January 2022 (the Warning Notice).

Matters to be Determined

The Warning Notice asked the Panel to determine whether to make an Order appointing a trustee to the Scheme under section 7(3)(a) and/or (c) of the Pensions Act 1995 (PA 95) following an application made under section 7(5A) of PA 95 and section 10(2)(b) of the Pensions Act 2004 (PA 04) (the Application) by Mr Andrew James Bridgen.

The Decision

The Panel has determined to make an Order appointing Punter Southall Governance Services (Punter Southall) to the Scheme together with further associated orders under sections 8 and 9 of PA 95. The terms of the Order appointing Punter Southall are recited at the conclusion of this Determination Notice.

Directly Affected Parties

Under section 96(2)(d) PA 04 the Panel must give notice of its determination to such persons as appear to be directly affected by it. In this case the Panel considers the following persons to be directly affected by its determination:
1. A B Produce plc (the Employer);
2. Punter Southall;
3. Mr Andrew James Bridgen (Andrew Bridgen);
4. Mrs Ann Bridgen (Ann Bridgen);
5. Mr Alan William Bridgen (Alan Bridgen); and
6. Mr Paul Julian Bridgen (Paul Bridgen) (together, Ann Bridgen, Alan Bridgen and Paul Bridgen are referred to in this document as the Other Trustees).
The parties identified by the Panel as directly affected by its determination differ from those identified by the Case Team as directly affected by the regulatory action under consideration in the Warning Notice. JLT Trustees Limited (JLT) was identified by the Case Team as a directly affected party but is no longer considered by the Panel to be directly affected because it is no longer a trustee of the Scheme (as explained in paragraph 8 below). The Employer and Punter Southall were not identified as directly affected by the Case Team when the Warning Notice was first issued but the Panel considers them to be directly affected by its determination.

The Scheme

The Warning Notice states that:
1. the Scheme is a defined contribution scheme with four members who, alongside JLT as an independent trustee, are the only trustees;
2. it is not in dispute that the Scheme is an occupational pension scheme within the meaning of section 1 of the Pension Schemes Act 1993;
3. it is understood that the scheme is a 'small scheme', ie one that has fewer than 12 members where all members are trustees and take investment decisions unanimously, or which has an independent trustee.
Save for what is set out in paragraph 8 below, the above points have not been disputed by any of the directly affected parties in their representations.
In its representations on the Warning Notice dated 25 February 2022, JLT indicated that it intended to resign as a trustee of the Scheme. On 6 May 2022 it informed the Panel that it had tendered its resignation to the Employer and that this would take effect on 6 June 2022. It is, therefore, the Panel’s understanding that, at the time of this determination, JLT is no longer a trustee of the Scheme.

The Application

The Application comprises an email from Andrew Bridgen to TPR dated 18 November 2020, together with earlier email exchanges between Andrew Bridgen and TPR, and Andrew Bridgen and The Pensions Ombudsman (TPO). The 18 November 2020 email also attaches 11 documents described as all the relevant documents relating to the case.
The Application is described as a formal application under section 7(5A) of PA 95. Although not specifically requested in these terms, the Panel understood from the Application and accompanying documents that Andrew Bridgen was seeking the appointment of JLT with exclusive powers (or alternatively a new independent trustee on the same basis), and for the appointment to be made under either section 7(3)(a), or 7(3)(c) of PA 95, or both.
Andrew Bridgen’s reasons for seeking the appointment of a trustee in the Application and attached documents appeared to the Panel to be as follows:
1. The Other Trustees were improperly refusing to engage with Andrew Bridgen’s request for payment of his benefits (first raised with JLT on 16 September 2019, and with Paul Bridgen and the Employer in early 2017/2018), and JLT could not take any action in this regard because decisions needed to be made by a majority of the trustees.
2. The Other Trustees had improperly placed scheme assets on long term deposit with Lloyds Bank without Andrew Bridgen’s or JLT’s knowledge or agreement with the result that liquidity was not available for Andrew Bridgen to take his benefit entitlement. Andrew Bridgen had subsequently contacted Lloyds Bank who remitted these sums to the Scheme’s bank account (also with Lloyds Bank) after which he had received an initial payment.
3. The Scheme held sufficient funds in cash to pay the further benefits due to him, which JLT had calculated to be £516,460 following a valuation of the land owned by the Scheme in June 2020.
4. Scheme accounts had not been prepared for the last three years.
5. Rent from the Employer was due to the Scheme monthly but had not been paid since 31 May 2018, and this money was needed to provide liquidity to pay pension benefits.
6. The Other Trustees had failed to provide Scheme bank statements, and Andrew Bridgen had been excluded from meetings and decisions relating to the Scheme.
7. The Other Trustees had refused to agree to Andrew Bridgen’s transfer of his parliamentary pension lump sum into the Scheme in order to allow these sums to be distributed to him, despite this having no impact on Scheme funds or other beneficiaries.
8. The Other Trustees were not acting in a fair and impartial way or in accordance with their fiduciary duties and the law and were deliberately preventing Andrew Bridgen from accessing his pension benefits. Mr Bridgen suggests that this was in order to place him under financial hardship to prevent him from pursuing ongoing separate legal proceedings against them and the Employer’s finance director.
9. The Other Trustees had clear conflicts of interest which should be declared and they should recuse themselves from decisions relating to the payment of benefits to Andrew Bridgen.
10. TPR had exercised its trustee appointment power in similar circumstances in the 2008 case of Harvie Tyre Supplies Limited Retirement Benefits Scheme.

The Case Team’s position on the merits in the Warning Notice

The Warning Notice states that it has been prepared on the basis of the information provided by Andrew Bridgen alone and that the Case Team has not undertaken an investigation of its own to establish the veracity of his allegations.
The Case Team’s position on the merits of the Application as set out in the Warning Notice can be summarised as follows:
1. The assertions made by Andrew Bridgen as set out in paragraphs 11.2, 11.6, 11.7 and 11.8 above may be relevant to any consideration of an independent trustee appointment, but the Application did not include evidence to support these. It was clear, however, that there was disagreement between Andrew Bridgen and at least one of his co-trustees which might be sufficient to impair, and was not conducive to, the proper administration of the Scheme.
2. The information provided by Andrew Bridgen in the Application contained a number of examples of accusations and responses to these which the Case Team was unable to corroborate without any supporting evidence.
3. Based on the information provided in the Application, there was insufficient information to make a recommendation to the Panel, and no evidence that the tests for a trustee appointment set out in section 7(3)(a) or (c) were met.
4. As the dispute between the trustees appeared to be under active consideration by TPO with the possibility of a determination in the near future, and proceedings were underway in the High Court, the dispute had been placed before the appropriate forum allowing consideration of the issues raised by Andrew Bridgen.
5. There was no suggestion that JLT was failing in its responsibilities as the incumbent independent trustee and it was familiar with the issues. If the Panel appointed a trustee, it would be appropriate for JLT to have this role, rather than TPR undertaking a tender process and recommending an alternative independent trustee.
6. The case of Harvie Tyre Supplies Limited did not appear relevant because the decision to appoint a trustee in that case relied, not on a dispute between trustees, but on the failure of a single trustee to implement a decision that had been taken by all.
7. The Panel did not have the power to make an appointment under section 7(3)(b) of PA 95 (as this was a power exercisable by the executive arm of TPR), or section 7(3)(d) of PA 95 (as the power to appoint a trustee by application made under section 7(5A) of PA 95 was limited to section 7(3)(a) or (c) of PA 95). The Case Team indicated that if the Panel decided not to appoint a trustee, these powers could be deployed by TPR in the future with the benefit of evidence from TPO’s investigation.

Representations from parties identified as directly affected by the Case Team

On 24 February 2022, Trowers & Hamlin LLP (Trowers) provided representations on behalf of Andrew Bridgen. In summary, these stated that:
1. Andrew Bridgen was in favour of the Panel appointing JLT, or another independent trustee from TPR’s register, with exclusive powers.
2. Trowers were surprised at the Case Team’s view set out in paragraph 13.3 above as the evidence submitted with the Application made it clear that the trustees (excluding JLT) did not have the requisite knowledge and skill, and that Scheme assets were not being properly used.
3. In respect of Andrew Bridgen’s request for benefits to be paid to him:
  1. He had first made his wish to draw these on his 55th birthday known to Paul Bridgen and others in January 2017. He had received a total of £126,010 in three tranches by 5 May 2020 but had been unable to draw all his benefits from the Scheme to date because, despite being chased by JLT to progress matters the Other Trustees had refused to reply to its emails. In this regard, JLT had informed him that it did not have an email address for Ann Bridgen and that all contact it had with Ann and Alan Bridgen was through Paul Bridgen acting as a 'quasi-gatekeeper'.
  2. His benefits had not been paid because the rules of the Scheme required decisions to be taken by the trustees on a unanimous basis and the Other Trustees had refused to consent to this (the Panel notes that this contrasts with the submission summarised in paragraph 11.1 above which refers to trustee decision making by majority in relation to the payment of benefits to Andrew Bridgen).
  3. Insufficient liquidity in the Scheme could not be the reason for their refusal as solutions to this had been suggested to the Other Trustees and ignored, and the Other Trustees had also taken steps to prevent the Scheme being liquid (as summarised in paragraphs 14.4, 14.5 and 14.6 below).
  4. A lack of knowledge of their fiduciary duties, or how to respond to the request, could not be the reason for their refusal, because JLT had explained these matters to them.
  5. It appeared that the reason for their refusal was apathy towards their trustee duties and/or acting with malice towards Andrew Bridgen. The former provided grounds for the appointment of a trustee under both sections 7(3)(a) and (c) because the Other Trustees were not acting in accordance with the Scheme documentation which gave the right to Andrew Bridgen to take his benefits, and this in turn was preventing the proper use or application of Scheme assets. The latter may be present due to the fact that Andrew Bridgen had brought High Court proceedings (unfair prejudice petitions) against Paul Bridgen which had been very acrimonious, and in which Ann Bridgen and Alan Bridgen had taken Paul Bridgen’s side. This also provided grounds for the appointment of a trustee because allowing malicious personal feelings to determine their decisions in relation to Andrew Bridgen’s request evidenced a lack of knowledge and skill, and a misapplication of the Scheme’s assets.
4. As at December 2019/January 2020 rent due to the Scheme in respect of a property used by the Employer had not been paid for 20 months. This represented the sole source of income for the Scheme. Despite JLT chasing the Other Trustees to secure payment, it remained unpaid, together with rent that had accrued since that date. This provided grounds for a trustee appointment under section 7(3)(a) or (c) because the Other Trustees did not have the skills or desire to carry out their fiduciary duties, or because Scheme assets were not being collected and were therefore being misapplied.
5. The Other Trustees had placed Scheme assets (cash) on long term deposit at Lloyds Bank without the agreement of Andrew Bridgen or JLT. This had reduced the liquidity of the Scheme so that Andrew Bridgen could not withdraw his benefits, even though the other Trustees had had ample notice of his desire to draw these. This was further evidence of malice being the reason for the Other Trustees refusing his benefits and was grounds for appointing a trustee under section 7(3)(a) or (c).
6. The Other Trustees had refused to reply to an offer from a third party to purchase the land and shares owned by the Scheme (for an amount exceeding a valuation obtained by Paul Bridgen). If accepted this would have dealt with the Scheme’s liquidity issues and enabled all members’ benefits to be paid in full.
7. The Scheme had been left in a state of paralysis due to the refusal of the Other Trustees to engage and the need for all trustees to consent before the Scheme took any decisions.
On 18 February 2022, Paul Bridgen provided representations. In summary, these stated that:
1. As he understood it, the main concern was that the Scheme required an independent trustee, which it already had in JLT.
2. In relation to paragraph 11.1 above, he only became aware of Andrew Bridgen’s request to draw his benefits when JLT had informed him of this in December 2019.
3. In relation to paragraph 11.2 above, it was incorrect to state that Andrew Bridgen and JLT had not been aware of, or agreed to, the placing of Scheme funds on long term deposit. This had been in place in respect of Scheme funds since 2014 and had been orchestrated by Andrew Bridgen. It was very concerning that Andrew Bridgen had manipulated Lloyds Bank to return all long term deposits to the standard Scheme account without the knowledge of the Other Trustees or JLT.
4. In relation to paragraph 11.3 above, he had agreed to the land valuation being done but not to Andrew Bridgen’s share being taken from anything other than the available cash element, as he would also be 55 within a year and it would not be fair for one trustee to take all the cash reserves. Andrew Bridgen had already received circa £504,000 which was his share of the cash. The current cash held by the Scheme was enough to pay Andrew Bridgen the further £514,460 but only if he (Paul Bridgen) was to forgo his future entitlement to payments from the Scheme which would not be fair.
5. In relation to paragraph 11.5 above, rent was due to the Scheme of circa £150,000 but it had been agreed not to pay this because Andrew Bridgen currently lived in a property owned by Bridgen Investments Limited (BIL) (the Panel understands this to be a company connected with the Employer) and owed rent to it of circa £300,000. The property in question was mortgaged by BIL and Paul Bridgen, Ann Bridgen and Alan Bridgen had agreed to continue paying the mortgage payments rather than allow this to go into default. The amount owed to the Scheme would be paid with interest as soon as Andrew Bridgen paid the rent he owed, or the property was sold.
6. In relation to paragraph 11.6 above, Andrew Bridgen had had the same access to JLT as the other members, and bank statements had been supplied on a regular basis or as requested by JLT. In relation to exclusion from meetings, Scheme activities had always been conducted through JLT, mainly by email, which all trustees would have had a copy of.
7. In relation to paragraph 11.7 above, JLT had provided advice to him on this on 16 July 2020. Under the circumstances the Other Trustees found themselves in he felt that this would be an unnecessary complication. He further understood that this did not prevent Andrew Bridgen taking his parliamentary pension through some other route.
8. In relation to paragraph 11.8 above, Andrew Bridgen had received his share of the Scheme’s cash reserves as he had first requested.
On 18 February 2022, Alan and Ann Bridgen provided joint representations. In summary, these stated that:
1. The Scheme was set up for the benefit of the family and independent trustees were appointed to administer it. Alan and Ann were the beneficiaries alongside Andrew Bridgen and Paul Bridgen.
2. The alleged problems had arisen recently due to Andrew Bridgen’s desire to take all the cash out of the Scheme without due regard for the impact of this on the Scheme or other members. This was deemed unfair by the Other Trustees and JLT.
3. In relation to paragraph 11.2 above, the placing of Scheme cash on long term deposit had been the policy since 2018 at the insistence of Andrew Bridgen who had been frustrated that the cash was not earning interest in the current account. Andrew Bridgen’s behaviour in unilaterally unwinding these deposits was unacceptable.
4. In relation to paragraph 11.3 above, the other Trustees had agreed to Andrew Bridgen receiving his share of the available cash reserves. He had received circa £500,000 in this regard between December 2019 and May 2020. The Application and supporting material did not mention that he had received this amount.
5. In relation to paragraph 11.5 above, Andrew Bridgen continued to withhold rent in respect of a residential property owned by BIL and owed over £250,000. This had become the subject of legal action. The trustees and company were keen for this to be recognised before any more rent was paid to the Scheme by BIL and further cash payments made from the Scheme to Andrew Bridgen. This did not seem to be an unreasonable request.
6. In relation to paragraph 11.7 above, this was a matter outside the interests of the family or sponsoring company. Given the already complicated situation created by Andrew Bridgen, this should be dealt with outside the Scheme. It was understood that it was feasible to achieve the outcome he desired via alternative means.
On 25 February 2022, JLT provided representations. No comment was made by them in relation to the allegations made by Andrew Bridgen against the Other Trustees, as summarised in paragraph 13.1 above. In summary, JLT stated that:
1. JLT’s role had become increasingly difficult over time. There was an ongoing dispute between the four family members which had escalated into formal proceedings before TPO and the High Court. JLT had at all times remained impartial and professional and had also sought to make clear to its co-trustees their responsibilities.
2. In view of the increasingly unfortunate situation, JLT no longer wished to act as an independent trustee of the Scheme and intended to resign its trusteeship.
3. It followed that JLT did not agree to the proposal that it be appointed to the Scheme with exclusive powers.

Key procedural matters following referral of the case to the Panel

On 25 March 2022 the Case Team referred the case to the Panel for determination. In its handover letter it noted JLT’s position and set out its proposal that, if the Panel determined to appoint a trustee, a tender exercise could be undertaken at that point by TPR’s tender team to identify an appropriate independent trustee to take on the appointment. The Case Team also set out its view that, whilst some of the matters set out in the representations may be relevant or material to the Application, the relevant facts could not be established without a full investigation, and that no evidence had been provided in the representations that altered the Case Team’s view on the merits.
The Panel Chair considered that a more appropriate approach would be for a tender process to be carried out immediately so that the following steps could be completed prior to the Panel’s determination:
1. an alternative independent trustee could be identified;
2. that party had an opportunity to submit representations on the Warning Notice;
3. the other parties had the opportunity to submit further representations on whether that party should be appointed with exclusive powers.
Prior to the Panel reaching its determination, the Panel Chair also considered it appropriate for the Employer to have an opportunity to submit representations on the Warning Notice (because the draft appointment Order sought to oblige it to pay the fees and expenses of the appointed trustee in the event that the Scheme did not meet these).
Accordingly, on 1 April 2022, the Panel Chair issued directions to the Case Team requiring it to identify and recommend an independent trustee, and to send the Warning Notice to the recommended independent trustee and to the Employer to seek representations.
On 1 April 2022, the Panel Chair also requested the following information:
1. From Andrew Bridgen, whether, in light of JLT’s position, he wished to maintain his application to appoint JLT, or whether he wished the Panel to appoint another independent trustee from TPR’s register.
2. From Paul Bridgen, Ann Bridgen and Alan Bridgen, whether they opposed the appointment of an independent trustee with exclusive powers (whether JLT or another independent trustee) as their representations were not clear on this point.
3. From JLT, its views on whether, had its trustee role with the Scheme been with exclusive powers, this would have resolved the issues the Scheme had encountered.
On 7 April 2022 the Case Team informed the Panel that it had changed its draft appointment Order so that this no longer obliged the Employer to pay the fees and expenses of the appointed trustee in the event that the Scheme did not meet these. The Panel understood from this that the Case Team had not yet complied with the Panel’s direction to send the WN to the Employer.
On 7 April 2022, Paul Bridgen informed the Panel that he strongly opposed the appointment of an independent trustee with exclusive powers given the background to TPR’s involvement in the Scheme and ongoing circumstances which would impact the Panel’s review. No further details were provided in relation to these circumstances but Paul Bridgen indicated that he had instructed Shakespeare Martineau who would contact the Panel shortly.
On 7 April 2022, Ann Bridgen and Alan Bridgen informed the Panel that they also opposed the appointment of an independent trustee with exclusive powers, that the matter was complex and that there were broader issues involving an ongoing High Court case. No further detail was provided in relation to these matters but they advised the Panel that they had instructed Shakespeare Martineau who would contact the Panel shortly.
On 8 April 2022 JLT provided a copy of the Trust Deed and Rules in force for the Scheme, which were dated 1 September 1988 (the 1988 Trust Deed and Rules).
On 12 April 2022, Trowers informed the Panel that its client, Andrew Bridgen, still wished for his application to be considered by the Panel, but that the Panel should appoint an independent trustee from TPR’s register. It also alleged that any representations provided by the Employer would be drafted by Paul Bridgen and most likely would be designed to smear Andrew Bridgen.
On 12 April, the Case Team was asked for its view on whether a vesting Order under section 9 of PA 95 was appropriate. It was also informed that the Panel Chair remained of the view that the Employer should be given the opportunity to submit representations on the Warning Notice (because the Employer’s powers under the 1988 Trust Deed and Rules to appoint and remove trustees would be affected by the requested appointment of a trustee with exclusive powers).
On 13 April 2022, the Case Team sent the Warning Notice to the Employer.
On 14 April 2022, the Case Team informed the Panel of its view that a vesting order under section 9 of PA 95 would be of limited use as it had no reason to believe that the existing trustees would refuse to enter into a deed transferring assets (which, in the Case Team’s experience would still be required by the Land Registry even if a vesting order was granted).
On 14 April 2022, JLT responded to the information request at paragraph 22.3 above as follows:
1. It found it very difficult to predict how the running of the Scheme and the issues that had arisen might have been different (if at all) if it had had exclusive powers.
2. The four individual trustees were all family members who were engaged in multiple ongoing disputes before TPO and the High Court and the administration of the Scheme would always have taken place against this backdrop.
3. In light of this, whilst exclusive powers might have enabled JLT to take decisions in relation to the Scheme’s administration more quickly, there would have been a risk that such decisions would have been challenged by one or more family members who did not agree with them.
On the same date, JLT informed the Panel that since the changes in pension tax legislation had come into effect on 6 April 2006, they had on three separate occasions issued revised documentation to the trustees to execute. The latest of these had been sent in 2019 (the 2019 Draft Deed and Rules) but had not yet been approved by all the individual trustees. The version of the 2019 Draft Deed and Rules provided to the Panel by JLT showed that the Employer and the Other Trustees had signed this but that Andrew Bridgen had not.
On 21 April 2022 the Case Team informed the Panel that Punter Southall had been identified as the proposed trustee following completion of the tender process and the Warning Notice was sent to Punter Southall on 26 April 2022.
On 9 May 2022:
1. Representations on the Warning Notice and accompanying bundle were provided by the Employer.
2. Punter Southall confirmed that it would not be submitting any representations.
The Panel Chair directed that any final representations any of the parties (including the Employer and Punter Southall) wished to submit should be provided by midday on 20 May 2022.

Further representations provided by the parties

In summary, the Employer’s 9 May 2022 representations stated that:
1. It did not agree with the proposal to appoint an independent trustee with exclusive powers and agreed with the Case Team that none of the criteria set out in sections 7(3)(a) and (c) were fulfilled. The Other Trustees had always taken and implemented decisions under the professional guidance of JLT and in the best interests of the Scheme and its members.
2. The placing of Scheme assets on deposit had commenced in 2014 at the request of Andrew Bridgen and fixed term deposits had been placed on a revolving basis with Lloyds Bank who provided current account services to the Scheme. To date it had not been instructed to amend the policy of placing these deposits.
3. By the end of May 2020 Andrew Bridgen had received £504,000 from the Scheme as approved by the other trustees.
4. The Employer had provided administrative support to JLT which included the regular provision of Scheme bank statements which had been available to Andrew Bridgen.
5. The transfer of Andrew Bridgen’s parliamentary pension into the Scheme was ineligible under Rule 10.2 of the Scheme. In addition, any such transfer was subject to a formal application and approval process by the trustees. It was not aware that such an application had been made.
6. Judgment had been given in Andrew Bridgen’s unfair prejudice proceedings in the High Court and had included comments by the Judge that Andrew Bridgen had lied under oath and was not credible as a witness unless his statements were corroborated by other evidence. A trial of remedies was now awaited (which was not expected to take place prior to the end of 2022). The High Court could make orders in this trial affecting the ultimate ownership of the Employer and it would be inappropriate for the Panel to appoint a trustee pending the outcome of this trial.
7. It did not contest the appointment of a 'like for like' alternative to JLT as independent trustee in itself. The fundamental issue was the breakdown in relationship between Andrew Bridgen and Paul Bridgen. Using its power of appointment under the Scheme Rules, as soon as it received notification of the Panel’s decision, it proposed to appoint its own independent trustee having regard to the views of the member trustees. The Panel understood this to mean that the Employer would only do this if the Panel’s decision was not to appoint a trustee.
8. The Scheme was a 9.8% shareholder in the Employer’s parent and sister companies and was also the ultimate landlord of the Employer’s business premises. The appointment of a new trustee with exclusive powers would be detrimental to the proper administration of the Scheme because the new trustee would not have the required knowledge of the Employer’s business. Many of the trustees’ decisions were closely linked to the business of the Employer and required a complete and thorough understanding of that business.
On 20 May 2022, further representations were provided by:
1. Trowers on behalf of Andrew Bridgen;
2. Shakespeare Martineau on behalf of the Other Trustees; and
3. The Employer.
In summary, the representations provided on behalf of Andrew Bridgen stated that:
1. The High Court judgment deciding the unfair prejudice petition found breaches of fiduciary duties by Paul Bridgen and other directors of the Employer, unfairly prejudicial conduct and dishonesty by Paul Bridgen, and was critical of the governance of the Employer.
2. Paul Bridgen had overseen the Employer during a period when it had not been paying rent due to the Scheme.
3. Contrary to the Employer’s representations, Scheme decisions had not always been taken under guidance from JLT and in the best interests of the Scheme and its members, specifically:
  1. The Scheme had not received rent from the Employer despite JLT raising the issue multiple times.
  2. The Finance Director of the Employer had instructed Lloyds Bank to place Scheme assets on long term deposits without the requisite consent from JLT and Andrew Bridgen, despite not being a trustee and despite Andrew Bridgen having communicated his intention to draw his benefits in October 2019.
4. In relation to paragraph 36.8 above, the appointment of a trustee with exclusive powers would not be detrimental to the proper administration of the Scheme because:
  1. Alan Bridgen and Ann Bridgen retired from the Employer’s business 25 years ago so the extent to which they had relevant key information relating to the business was debatable.
  2. Neither Alan Bridgen or Ann Bridgen took an active role in the administration of the Scheme, despite being trustees, and allowed the Finance Director of the Employer to draft Scheme correspondence on their behalf. JLT did not receive contact from them and did not hold an email address for Ann Bridgen.
  3. Contrary to the Employer’s representation that an independent trustee with exclusive powers would not have the required knowledge of the business to administer the Scheme, professional trustees had expertise in quickly familiarising themselves with schemes and the employer’s business, had been appointed to schemes with more complicated circumstances and with larger employers and would be able to undertake the proposed appointment to the Scheme.
  4. A professional trustee could seek the views of the other trustees regarding the Employer’s business if this was required.
5. In relation to paragraph 36.6 above, TPR should not delay any appointment of an independent trustee until after the remedies hearing in the High Court proceedings. This would prolong the improper management of, and cause further damage to, the Scheme. An independent trustee could postpone any decisions impacted by the remedies hearing if appropriate.
6. In relation to paragraph 36.7 above it was accepted that one of the fundamental issues was the breakdown in the relationship between Andrew Bridgen and Paul Bridgen, which had permeated the Scheme and the Employer’s business. As a consequence, the trustees were unable to act as impartial, skilful trustees in relation to the Scheme.
In summary, the Employer’s 20 May 2022 representations stated that:
1. Having considered the additional material provided since its representations dated 9 May 2022 it continued to oppose the appointment of an independent trustee with exclusive powers.
2. It objected to the allegation referred to in paragraph 27 above (that the Employer’s representations would be prepared by Paul Bridgen and designed to smear Andrew Bridgen). Paul Bridgen had recused himself from all Employer Board discussions and decisions concerning the Warning Notice and the Employer representations, and the High Court judgment of 29 March 2022 had found Andrew Bridgen to be an unreliable witness whose evidence could not be relied upon, and that he had lied on oath and given dishonest evidence.
3. The Scheme had operated without any issues for circa 25 years, and the current application had only arisen from Andrew Bridgen’s failed attempts to operate outside of the 1988 Trust Deed and Rules.
4. JLT’s attempts to amend the 1988 Trust Deed and Rules in 2018 had had the full cooperation of the Other Trustees and the Employer but had been frustrated by Andrew Bridgen’s refusal to engage.
5. In relation to the matters set out in paragraph 14 above:
  1. The Finance Director of the Employer had no recollection of any conversation with Andrew Bridgen in January 2017 concerning his intention to draw his benefits in October 2019.
  2. The Employer did not owe rent to the Scheme. The relevant lease agreement was between the Scheme and BIL.
  3. The Scheme accounts had previously been prepared by the Employer’s auditors, but this process had been disrupted by Andrew Bridgen’s allegations of fraud. These allegations had been found to be without foundation by the Police and the High Court.
In summary, the representations provided on behalf of the Other Trustees stated that:
1. The Other Trustees continued to oppose the application to appoint an independent trustee with exclusive powers. Their preferred solution was to work with the Employer to appoint a new independent trustee.
2. The Scheme could only continue to function if Andrew Bridgen transferred his share of the fund to another pension arrangement. However, a valuation of Andrew Bridgen’s benefits would be extremely difficult pending the outcome of the High Court litigation. When this was resolved the trustees would commission a valuation and arrange for Andrew Bridgen’s benefits to be transferred. Resolution of the possession claim by BIL against Andrew Bridgen would allow BIL to purchase land from the Scheme, thereby enabling the Scheme to pay Andrew Bridgen his share.
3. The Scheme was governed by the 1988 Trust Deed and Rules, which provided for decisions to be made by a majority of the Managing Trustees (currently the Other Trustees and Andrew Bridgen). There had been a number of attempts to update the 1988 Trust Deed and Rules, the most recent version of which had been signed by the Employer and the Other Trustees, but not by Andrew Bridgen.
4. The Other Trustees agreed with JLT’s comments (set out in paragraph 31 above) on the benefits or otherwise of it having had exclusive powers, and its view on whether this would have changed the current circumstances.
5. In relation to paragraph 14.2 above, the following were indicators of Andrew Bridgen’s knowledge and skill:
  1. In 2020 he had wished to assume exclusive trustee decision-making powers which JLT advised was not in accordance with the Scheme’s governing documentation.
  2. In December 2019 he unilaterally contacted Lloyds Bank regarding legitimate Scheme deposits.
  3. In March 2018 he attempted to secure personal funding from the Scheme which would have been an unauthorised payment.
  4. In July 2020 he had incorrectly assumed he could transfer his Parliamentary pension into the Scheme without Employer or trustee approval.
6. In relation to paragraph 14.3.1:
  1. The Other Trustees had no recollection of any conversations in 2017 relating to Andrew Bridgen’s intention to draw his benefits. The first indication the Other Trustees received of this was contained in a letter from Trowers to JLT dated 16 September 2019.
  2. A total of £504,039 had been paid to Andrew Bridgen between December 2019 and May 2020 which was nearly 50% of the cash in the Scheme and the full amount of the drawdown originally sought. The remaining Scheme assets were illiquid. Andrew Bridgen’s failure to refer to receipt of this total sum in his representations was at best misleading.
  3. Alan Bridgen and Ann Bridgen had a joint personal email address; Paul Bridgen was not a ‘quasi-gatekeeper’ for JLT’s correspondence with them.
7. In relation to paragraph 14.3.2, the 1988 Trust Deed and Rules provided for decisions to be taken by a majority of the trustees, not unanimously as stated.
8. In relation to paragraph 14.3.5, Ann and Alan Bridgen had not taken the side of Paul Bridgen in the High Court proceedings. They had supported, and continued to support, both Andrew Bridgen and Paul Bridgen.
9. In relation to paragraph 14.4, the lease was between the Scheme and BIL, not the Employer. Andrew Bridgen owed BIL approximately £300,000 in rent arrears in respect of his occupation of a residential property. BIL had bought this property from him to assist him whilst he was in personal difficulties and, as a result had been unable to satisfy loan notes to Ann and Alan Bridgen. BIL was currently seeking recovery of these rent arrears and possession of the property. The Other Trustees understood that BIL would pay the rent it owed to the Scheme when Andrew Bridgen had paid his own rent arrears to BIL. This was an example of the inextricable links between the Scheme and the other interests of the members.
10. In relation to paragraph 14.5, the Other Trustees were in agreement with the Employer’s representations.
11. In relation to paragraph 14.6, it was untrue to state that the Other Trustees refused to consider the offer to purchase, which was at best an expression of interest. An opportunity was given to the investor to provide more detail but it failed to do so.
12. In relation to the preparation of Scheme accounts, this was normally undertaken by the Employer’s auditors but this had proved very difficult due to the claims brought by Andrew Bridgen against the Employer and associated companies. There was no statutory requirement to produce these as the requirements of section 47(1)(a) PA 95 did not apply to the Scheme. (The Panel understood this to be a submission that the Scheme was exempt from the requirement to appoint an auditor due to its 'small scheme' status.)
On 25 May 2022, the Panel requested further information from the parties in relation to (1) whether the Scheme was a 'small scheme' as indicated in the Warning Notice; (2) trustee decision-making on the pursuit of rent owed to the Scheme and potential conflicts of interest in this regard; (3) steps taken by the trustees to execute a revised trust deed and rules; (4) payments to date from the Scheme to Andrew Bridgen; (5) the preparation of scheme accounts; and (6) the reasons for JLT’s resignation.
In response to the Panel’s question to the trustees and the Case Team whether the Scheme met the legislative definition of a small scheme contained in (for example) Regulation 1 of The Occupational Pension Schemes (Investment) Regulations 2005 (the Regulations):
1. The Other Trustees submitted that while Rule 3.2 of the 1988 Trust Deed and Rules required the unanimous agreement of the member trustees in relation to investment decisions, on the face of it, the Scheme’s documentation had not been updated to reflect the requirement in the Regulations for all decisions to be made by unanimous agreement. However, the intention had always been that the Scheme should be administered as a small scheme and all decisions had in practice been taken unanimously. The Other Trustees had also been given legal advice to the effect that it was likely that, since all members had seen or been sent the 2019 Draft Deed and Rules, the Scheme could be treated as being governed by this revised deed (and would consequently meet the small scheme definition in the Regulations).
2. JLT submitted that, even though the 1988 Trust Deed and Rules allowed for majority decisions, it had always operated the Scheme under the requirement that all decisions must be unanimous. It had tried to remedy the situation by asking the trustees to execute the 2019 Draft Deed and Rules which would have resolved any ambiguity in relation to the Scheme’s small scheme status.
3. The Case Team did not dispute that, if the governing documentation did not provide for unanimity of all member trustees on decisions relating to investment, the Scheme would not meet the criteria for a small scheme set out in the Regulations.
4. Andrew Bridgen did not provide a response.
In response to questions from the Panel on trustee decision-making in connection with the pursuit of rent due to the Scheme and related potential conflicts of interest:
1. The Other Trustees were aware that rent of £187,000 was owed to the Scheme by BIL in respect of land at Repton Road, Measham. However, in view of the debt due from Andrew Bridgen to BIL of circa £300,000 in respect of a different property, the Other Trustees decided that the payment of rent to the Scheme by BIL should be held in abeyance pending resolution of the dispute between BIL and Andrew Bridgen. No suggestion of formal recovery action by the Scheme against BIL had been tabled by any trustee, nor any resolution passed to that effect.
2. An explanation was provided on behalf of Paul Bridgen on the comment in his representations dated 18 February 2022 that “it was agreed a stay of payments to the SSAS until either the rent has been paid or the property has been sold.” This referred to a tacit understanding between BIL’s directors (excluding Paul Bridgen who had recused himself because of his trustee role) and the Other Trustees rather than any formal agreement between BIL and the trustees.
3. According to Paul Bridgen, BIL’s directors (excluding him) took the decision not to pay the Scheme on commercial grounds in the best interests of BIL. Ann and Alan Bridgen were not a party to this decision but were subsequently empathetic to BIL’s stance.
4. The Other Trustees had been aware of the potential for conflict since the establishment of the Scheme but all previous decisions had been taken unanimously by all the family trustees. As a shareholder and director of BIL Paul Bridgen had elected to recuse himself from his role in these companies when appropriate to maintain his integrity as a trustee of the Scheme. Alan and Ann Bridgen were not shareholders or directors in BIL. As the parents of Andrew Bridgen and Paul Bridgen they had always adopted an impartial and equitable viewpoint in their conduct as trustees given the potential for emotional conflict to arise.
In response to the Panel’s questions to JLT and Andrew Bridgen on the steps taken by them in relation to a revised deed and rules:
1. JLT indicated that its first two attempts to update the Scheme’s documentation were not successful and the relevant deeds were not returned to it executed by the Employer or any of the member trustees. Following its third attempt, the 2019 Draft Deed and Rules was returned to JLT signed by the Other Trustees but was never returned by Andrew Bridgen. JLT was not aware of Andrew Bridgen’s reasons for not signing this.
2. Andrew Bridgen indicated that he had received the 2019 Draft Deed and Rules from JLT without prior notice that the Scheme rules were to be changed and at a time when he had been excluded from the management of the Scheme. When he was presented with this deed that had already been signed by the Other Trustees he was suspicious of their motives and asked JLT for an explanation. It took time for JLT to respond and for Andrew Bridgen then to consider its response. Ultimately, JLT advised him that the Other Trustees had withdrawn their approval for the rules to be changed.
Andrew Bridgen confirmed that he had received the sum of £504,000 as referred to in paragraph 36.3 above.
In response to the Panel’s question to Paul Bridgen on whether scheme accounts had been prepared since January 2020 (when he had indicated to JLT that going forward they would be prepared annually with the business accounts), he stated that they had not. This was because the Employer was focused on a protracted audit exercise which had been frustrated due to the High Court proceedings and the auditor’s requirements in these circumstances. It remained the Employer’s intention to work with the professional trustees on completing scheme accounts as soon as practicably possible.
In response to the Panel’s question to JLT on why its role had become increasingly difficult over time (as set out in its representations dated 25 February 2022), JLT stated:

“Although historically our relationship with our co-trustees has been good, we consider our role as trustee became untenable because of the ongoing disputes, which appear irreconcilable.

Across our client book, our role as SSAS trustee is based on us working collaboratively and impartially with our co-trustees without having sole discretion to make decisions. We therefore believe that a newly appointed independent trustee would be better placed to make any decisions required to resolve the matters in dispute.”

The Law

Section 7(3) PA 95 states:

“The Authority may also by order appoint a trustee where they are satisfied that it is reasonable to do so in order:

“(a) to secure that the trustees as a whole have, or exercise, the necessary knowledge and skill for the proper administration of the scheme,
(b) to secure that the number of trustees is sufficient for the proper administration of the scheme,
(c) to secure the proper use or application of the assets of the scheme, or
(d) otherwise to protect the interests of the generality of the members of the scheme.”
Section 7(5) PA 95 states:

“The power to appoint a trustee by an order under this section includes power by such an order—

(a) to determine the appropriate number of trustees for the proper administration of the scheme,
(b) to require a trustee appointed by the order to be paid fees and expenses out of the scheme’s resources,
(c) to provide for the removal or replacement of such a trustee.”
Section 7(5A) PA 95 states:

“An application may be made to the Authority in relation to a trust scheme by—

(a) the trustees of the scheme,
(b) the employer, or
(c) any member of the scheme,

for the appointment of a trustee of the scheme under subsection (3)(a) or (c).”
Section 8 PA 95 states:

“(1) An order under section 7 appointing a trustee may provide for any fees and expenses of trustees appointed under the order to be paid-

(a) by the employer,
(b) out of the resources of the scheme, or
(c) partly by the employer and partly out of those resources.

(2) Such an order may also provide that an amount equal to the amount (if any) paid out of the resources of the scheme by virtue of subsection (1)(b) or (c) is to be treated for all purposes as a debt due from the employer to the trustees of the scheme.

(3) Subject to subsection (4), a trustee appointed under that section shall, unless he is the independent trustee and section 22 applies in relation to the scheme, have the same powers and duties as the other trustees.

(4) Such an order may make provision— (a) for restricting the powers or duties of a trustee so appointed, (b) for powers or duties to be exercisable by a trustee so appointed to the exclusion of other trustees.”
Section 9 PA 95 states:

“Where the Authority have power under this Part to appoint or remove a trustee or a trustee is removed under section 3A, they may exercise by order the same jurisdiction and powers as are exercisable by the High Court or, in relation to a trust scheme subject to the law of Scotland, the Court of Session for vesting any property in, or transferring any property to, trustees in consequence of the appointment or of the removal.”
Section 10(1) and (2) PA 04 state:

“(1) The Determinations Panel is to exercise on behalf of the Regulator—

(a) the power to determine, in the circumstances described in subsection (2), whether to exercise a reserved regulatory function,
(b) where it so determines to exercise a reserved regulatory function, the power to exercise the function in question.

(2) Those circumstances are—

(a) where the Regulator considers that the exercise of the reserved regulatory function may be appropriate, or
(b) where an application is made under, or by virtue of, any of the provisions listed in subsection (6) for the Regulator to exercise the reserved regulatory function.”
Section 10(6) PA 04 states:

“The provisions referred to in subsection (2)(b) are—
[…]
(g) section 7(5A) of that Act (application for appointment of a trustee under section 7(3)(a) or (c) of that Act);”
Section 100 PA 04 states:

“(1) The Regulator must have regard to the matters mentioned in subsection (2)—

(a) when determining whether to exercise a regulatory function—
(i) in a case where the requirements of the standard or special procedure apply, or
(ii) on a review under section 99, and
(b) when exercising the regulatory function in question.

(2) Those matters are—

(a) the interests of the generality of the members of the scheme to which the exercise of the function relates, and
(b) the interests of such persons as appear to the Regulator to be directly affected by the exercise.”
Regulation 1(2) The Occupational Pension Scheme (Investment) Regulations 2005 states:

“In these Regulations—
[…]
'small scheme' means a scheme with fewer than 12 members, where—

(a) all the members are trustees of the scheme and either—
(i) the provisions of the scheme provide that all decisions which fall to be made by the trustees are made by the unanimous agreement of the trustees who are members of the scheme, or
(ii) the scheme has a trustee who is independent in relation to the scheme for the purposes of section 23 of the 1995 Act (power to appoint independent trustees), and is registered in the register maintained by the Authority in accordance with regulations made under subsection (4) of that section; or

(b) all the members are directors of a company which is the sole trustee of the scheme, and either—
(i) the provisions of the scheme provide that any decisions made by the company in its capacity as trustee are made by the unanimous agreement of all the directors who are members of the scheme, or
(ii) one of the directors of the company is independent in relation to the scheme for the purposes of section 23 of the 1995 Act, and is registered in the register maintained by the Authority in accordance with regulations made under subsection (4) of that section;”

Reasons for Decision

The Panel received a number of representations from the directly affected parties many of which focused on matters other than the specific legal tests that were before the Panel. The Panel’s sole role in this case is to decide whether to make an Order appointing a trustee and various associated orders (including whether any such appointment should be with exclusive powers) with reference to the legislative tests set out in sections 7, 8 and 9 of PA 95. The Panel’s conclusions and reasons in relation to this exercise are set out below.
In making its decision the Panel had regard to the matters set out in section 100 of PA 04 as well as to the objectives of TPR set out in section 5 of PA 04.
Section 7 of PA 95 gives the Panel the power to appoint a trustee to an occupational pension scheme. It is not in dispute that the Scheme is such a scheme. The Panel accordingly finds that it is.
Andrew Bridgen as a member of the Scheme is entitled under section 7(5A) PA 95 to make an application for the appointment of a trustee.
The Panel treated Trowers’ email of 12 April 2022 (referred to in paragraph 27 above) as confirmation that Andrew Bridgen had withdrawn his application to appoint JLT with exclusive powers. Accordingly, the matter before the Panel is whether to appoint Punter Southall to the Scheme with exclusive powers and associated orders.
The Panel is satisfied that it is reasonable to appoint an independent trustee under both sections 7(3)(a) and 7(3)(c) PA 95. Taking each in turn:

Section 7(3)(a) - knowledge and skill

The Panel is satisfied that it is reasonable to appoint a trustee to the Scheme to secure that the trustees as a whole have the necessary knowledge and skill to properly administer the Scheme. This is because the material before the Panel demonstrates that:
1. The Other Trustees have placed considerable value in having the expertise and guidance of an independent trustee (JLT) over the years and the Scheme no longer has access to this in light of JLT’s resignation. For example:
  1. In Ann and Alan Bridgen’s representations dated 18 February 2022 they state “The SSAS has ticked over for many years under the guidance of the independent trustees with some administrative support from the company. We understand that the relationship between JLT and the company is good and any matters dealt with promptly between the two parties.”
  2. In Paul Bridgen’s email to the trustees dated 9 January 2020 (in response to JLT’s indication that it was considering its ongoing involvement in the Scheme due to the current situation between the trustees) he states “As previously highlighted the involvement and measured advice from professional and independent trustees will be more important than ever.”
2. Guidance from JLT has been necessary to ensure the proper administration of the Scheme. For example:
  1. JLT’s email to the trustees dated 9 January 2020 states that “We acknowledge a request from Mr Andrew Bridgen to assume responsibility for the because it is outside the remit of our contracted role and more importantly not in accordance with the terms of the trust deed and rules.”
  2. According to the representations (and attachments) of the Other Trustees dated 20 May 2022 JLT advised the trustees that Andrew Bridgen’s request for a loan from the Scheme (which the Employer had indicated would have the support of the Other Trustees) would constitute an unauthorised payment.
3. Without an independent trustee, there is a serious risk that the trustees as a whole will not have the necessary knowledge and skill to properly administer the Scheme. This is evidenced by:
  1. The matters set out in paragraph 63.2 above.
  2. The apparent risk that the Scheme may not have met the relevant legislative definitions of a 'small scheme' at all material times. There is a consequent risk of historic and ongoing unremedied breaches of legislation due to a mistaken reliance on small scheme status (including in relation to employer-related investments, and the appointment of a scheme auditor – see paragraph 40.12 above). The Panel reaches this view having considered the 1988 Trust Deed and Rules and the points made in paragraph 42 above, from which it appears that, for at least a period of the Scheme’s existence, the voting provisions in the 1988 Trust Deed and Rules have not satisfied the criteria for a small scheme set out in the Regulations and/or in similarly worded legislation providing exemptions for small schemes from legislative requirements. Specifically, as clause 12.7 of the 1988 Trust Deed and Rules provides for decisions by a majority of the member trustees, it does not satisfy the requirement that all trustee decisions should be made by the unanimous agreement of these trustees. The Panel does not accept (if this is being suggested) that if the parties had in fact administered the Scheme as a small scheme this means that it was, notwithstanding that it did not meet the relevant legislative definition. Nor does the Panel accept that the Scheme has in fact been administered in this way and that decisions have always been taken unanimously. For example, the matters referred to in paragraph 43 above show that the Other Trustees alone have taken decisions in relation to the trustees’ response to the non-payment of rent. The Panel considers that an independent trustee is needed in order to ensure that the trustees have the requisite knowledge and skill to understand and resolve these issues.
  3. The failure by the trustees to execute revised scheme documentation over a prolonged period, despite JLT’s indication that it has sent revised documentation to the trustees for execution on three separate occasions since 2006 (although the Panel notes in relation to JLT’s third attempt that the Other Trustees have executed the 2019 Draft Deed and Rules). The Panel notes JLT’s comment that one of the consequences of the Scheme’s governing documentation not being brought up to date is that the small scheme issue highlighted above has not been remedied.
  4. The likely inability of Andrew Bridgen and the Other Trustees to be able to properly exercise their discretionary powers under the trust due to the breakdown in family relationships. The Panel notes the severe breakdown in the family relationships between the member trustees, in particular between Andrew Bridgen and Paul Bridgen, and that – while the parties do not agree on the reasons for this breakdown – all agree that the breakdown has occurred. The Panel also notes JLT’s comment (set out in paragraph 47 above) that “Although historically our relationship with our co-trustees has been good, we consider our role as trustee became untenable because of the ongoing disputes, which appear irreconcilable.” The Panel concludes that this gives rise to a very high chance that Andrew Bridgen will take into account his personal disapproval of Paul Bridgen (and the Other Trustees), and vice versa, whenever discretionary powers relating to any of them need to be exercised. In that event their discretionary decision-making powers will not be properly exercised (either because no proper exercise of the discretion has been made, or alternatively an irrelevant consideration has been taken into account).
  5. The apparent failure to identify or manage conflicts of interest that have arisen in relation to the trustees’ consideration of the pursuit of rent due to the Scheme from BIL, or to otherwise properly consider pursuing that rent. Whilst Paul Bridgen recused himself from BIL’s decision to withhold the rent it owed to the Scheme, he does not appear to have identified or managed the converse side of that conflict, i.e. the conflict in him considering as a trustee the pursuit of rent, given his role in BIL. Subject to the lease arrangements not constituting a prohibited employer-related investment (which has yet to be established), the Panel would expect a trustee to seriously consider pursuing the rent due to the Scheme, including applying critical scrutiny to the legality of any arguments put forward by BIL for non-payment. The Other Trustees do not appear to have done either of these things.
4. The appointment of an independent trustee on a 'like for like basis with JLT is not disputed by the Other Trustees or the Employer, nor is the appointment of Punter Southall. Their objection is that this appointment should not be with exclusive powers.
The Panel is also satisfied that it is reasonable to appoint a trustee to the Scheme to secure that the trustees as a whole exercise the necessary knowledge and skill to properly administer the Scheme. This is because, in light of the Panel’s conclusion in paragraph 63.3 above that without an independent trustee there is a serious risk that the trustees will not have the necessary knowledge and skill, there is accordingly a serious risk that they will also be unable to exercise this.

Section 7(3)(c) - proper use or application of scheme assets

The Panel is also satisfied that it is reasonable to appoint a trustee to the Scheme to secure the proper use or application of the Scheme’s assets. The matters relied upon by the Panel in paragraph 63.3 to establish the risk to the proper administration of the Scheme without an independent trustee also show a risk to the proper use or application of the Scheme’s assets, because all of these matters relate, or have the potential to relate, to Scheme assets. For example, the trustees’ approach to the pursuit of rent due to the Scheme, and the possibility of breaches of employer-related investment provisions due to a mistaken reliance on small scheme status.

Exclusivity

The Panel considers that it is reasonable to conclude that all the Scheme issues highlighted above can only be resolved by a new independent trustee exercising powers exclusively given the inability of the current trustees (including JLT without the benefit of exclusive powers) over a period of years to resolve these.
The Panel notes the following comments from JLT (referred to in paragraph 47 above):

“Although historically our relationship with our co-trustees has been good, we consider our role as trustee became untenable because of the ongoing disputes, which appear irreconcilable.

Across our client book, our role as SSAS trustee is based on us working collaboratively and impartially with our co-trustees without having sole discretion to make decisions. We therefore believe that a newly appointed independent trustee would be better placed to make any decisions required to resolve the matters in dispute.”

The Panel agrees with the assessment in the final sentence and the implication contained in it that resolving the matters in dispute can only be achieved if an exclusive powers appointment is made (because otherwise disagreements will persist due to the irreconcilable differences, the frustration experienced by JLT will be repeated and a new independent trustee will not in fact be better placed to make decisions resolving the matters in dispute).
The Panel also notes that, whilst the Other Trustees have stated their objection to exclusivity they have not provided reasons for this over and above what is set out in paragraphs 24, 25 and 40 above (which do not address the Panel’s concern in paragraph 66 above).

Reasons not to appoint

Prior to reaching its final conclusions on the matters above, the Panel considered the following reasons raised by the parties for not appointing an independent trustee, or not appointing an independent trustee with exclusive powers.
1. In relation to the Employer’s own proposal to appoint an independent trustee, as set out in paragraph 36.7 above, the Panel did not understand the Employer to be submitting that this was a reason for the Panel not to appoint. Rather the Panel understood the Employer to be indicating that it would appoint an independent trustee if the Panel chose not to. In any event the Panel did not consider this to be a good reason for it not to appoint, given that (1) the matter was before it; (2) it would likely take time for an appointment by the Employer given its stated intention to seek the prior views of the members; and (3) any appointment of an independent trustee by the Employer would not be with exclusive powers. Moreover, in order to secure small scheme status for the Scheme, it would be necessary, without a provision for unanimous member trustee decision-making, to appoint a trustee from TPR’s register of independent trustees and the Panel was well-placed to do this.
2. The Panel was not persuaded by the Employer’s argument that in the forthcoming trial of remedies in the High Court (which was not expected to take place prior to the end of 2022), the Court could make orders affecting the ultimate ownership of the Employer and it would be inappropriate for the Panel to appoint a trustee pending the outcome of this trial. No explanation has been provided by the Employer as to why an order of this type might present a problem if a new independent trustee was appointed before it was made. The Panel also noted that this issue is not seen by the Employer as a barrier to its own proposal to appoint a new independent trustee, as set out above.
3. The Panel did not place weight on the Case Team’s submission set out at paragraph 13.7 above, as the relevance of this to whether or not the Panel should appoint (now) under section 7(3)(a) or (c) of PA 95 was not clear. In any event the Panel considered it was desirable for the issues currently faced by the Scheme to be resolved without any further delay.
4. In relation to the Employer’s submission that the appointment of a new independent trustee with exclusive powers would be detrimental to the proper administration of the Scheme because a new trustee would not have the required knowledge of the Employer’s business, the Panel did not consider that this was a good reason not to appoint. The Panel would expect any newly appointed independent trustee to familiarise itself with all matters relevant to the administration of the Scheme, including the Employer’s business. Any such exercise would involve that new trustee liaising with the other trustees and Employer, as it considered appropriate, in order to comply with its fiduciary duties.
5. The Panel noted JLT’s view that, if its appointment to the Scheme had been with exclusive powers, although this may have enabled it to take decisions in relation to the Scheme’s administration more quickly, there would have been a risk that these decisions would have been challenged by one or more family members who did not agree with them. The Panel considered that the risk of a challenge was not a good reason not to appoint, especially since the purpose and basis of the appointment was to ensure that the decisions made by the trustees were legally robust.

Consideration of other matters

The Panel considered the other matters raised by Andrew Bridgen in support of his application, and the responses and other matters raised by the other directly affected parties, as set out earlier in this document. The Panel makes no findings on or in respect of these because it has formed the view that any such findings will not make a difference to its decision to appoint an independent trustee with exclusive powers.

Order

None of the directly affected parties has raised an objection to Punter Southall as the proposed independent trustee and the Panel also has no objection. The Panel therefore determines to make an Order appointing it as independent trustee to the Scheme.
The Panel considers it appropriate that the Order includes a provision that the fees of the independent trustee be met by the Scheme (the Panel understands from the 1988 Trust Deed and Rules that this is how JLT’s fees and expenses have been paid).
For the reasons set out in paragraphs 66-68 the Panel orders that the powers and duties exercisable by Punter Southall be exercised to the exclusion of all other trustees.
The Panel has considered the Case Team’s submission that a vesting order under section 9 PA 95 is not necessary (see paragraph 30 above). However, the Panel has concluded that it is appropriate for the Order to include such a provision in case it is required, and to make clear that the Panel expects the trustees to execute whatever documents are required in order to give effect to the Panel’s determination.

Conclusion

For the reasons outlined above the Panel determines that an Order be made in the following terms:
1. Punter Southall Governance Services (the Independent Trustee) is hereby appointed as trustee of the A B Produce PLC (SSAS) Retirement Benefits Scheme (the Scheme), with immediate effect.
2. The order at (1) is made because the Determinations Panel of the Pensions Regulator is satisfied that it is reasonable to do so in order:
  1. to secure that the trustees as a whole have, or exercise, the necessary knowledge and skill for the proper administration of the Scheme pursuant to section 7(3)(a) of the Pensions Act 1995, and
  2. to secure the proper use or application of the assets of the Scheme pursuant to section 7(3)(c) of the Pensions Act 1995.
3. The powers and duties exercisable by the Independent Trustee shall until further order be to the exclusion of all other trustees of the Scheme pursuant to section 8(4)(b) of the Pensions Act 1995.
4. The Independent Trustee’s fees and expenses in respect of the Scheme shall be paid out of the resources of the Scheme pursuant to section 8(1)(b) of the Pensions Act 1995.
5. All property and assets of the Scheme, heritable, moveable, real and personal, of every description and wherever situated and all rights pertaining to that property be vested in, assigned to and transferred to, the Independent Trustee as trustee of the Scheme pursuant to section 9 of the Pensions Act 1995.
6. The appointment of the Independent Trustee may be terminated, or the Independent Trustee replaced, at the expiration of 28 days’ notice from the Pensions Regulator to the Independent Trustee, pursuant to section 7(5)(c) of the Pensions Act 1995 and such power to terminate or replace the appointment shall be exercised by the Pensions Regulator in accordance with its delegation policy.
Appendix 1 to this Determination Notice contains important information about the rights to refer this decision to the Upper Tribunal.

Signed:

Chair: Antony Townsend

Dated: 1 July 2022

Appendix 1

Referral to the Tax and Chancery Chamber of the Upper Tribunal

You have the right to refer the determination to which this Determination Notice relates to the Tax and Chancery Chamber of the Upper Tribunal (the Tribunal).

A reference to the Tribunal is made by way of a written notice signed by you or your representative on your behalf and sent or delivered to the Tribunal with a copy of this Determination Notice. The reference notice must be received by the Tribunal no later than 28 days after this Determination Notice is given to you, unless you obtain an extension from the Tribunal.

The Tribunal’s address is:

Upper Tribunal
(Tax and Chancery Chamber)
Fifth Floor
Rolls Building
Fetter Lane
London
EC4A 1NL

Tel: 020 7612 9730

The detailed procedures for making a reference to the Tribunal are contained in section 103 PA 04 and the Tribunal procedure rules.

You should note that the Tribunal procedure rules provide that at the same time as sending or delivering a reference notice with the Tribunal, you must send a copy of the reference notice to The Pensions Regulator. Any copy reference notice should be sent to:

Determinations Panel Support
The Pensions Regulator
Napier House
Trafalgar Place
Brighton
BN1 4DW

Tel: 01273 811852

Email: panelsupport@tpr.gov.uk

A copy of the form for making a reference, FTC3 ‘Reference Notice (Financial Services)’, can be found on the GOV.UK website.