TPR Fines McDonald's Franchisee Trustee for Breach of Pension Law

UK workplace pensions watchdog The Pensions Regulator (TPR) has fined a corporate professional trustee firm nearly £104,000 for breaching multiple areas of pension law. The penalty is the largest fine handed to trustees by TPR.

Kent-based Link Pension Trustees Limited was fined £73,750 by TPR’s independent Determinations Panel for failing to obtain audited accounts for the plan for four consecutive years, not providing members with Statutory Money Purchase Illustrations (SMPI) for two consecutive years, and for neglecting to report those six breaches of law to TPR.

In a separate action arising from the same investigation, the trustee of the master trust plan was also fined £30,000 by TPR for failing to have at least three trustees on a master trust board.

“These were breaches of several important statutory obligations, which had occurred over several years,” said the Determinations Panel in its ruling. “They deprived members of information and a level of protection regarding their pension pots,” it said, adding that “the Panel would have expected better of a corporate professional trustee, particularly one that had been warned about breaches of one of the same obligations in 2011-12.”

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The plan provides pensions for 32 franchisees of McDonald’s restaurants, but is independent of the fast-food chain. It has 148 members, of which seven are active and 141 are deferred.

The breaches were identified through TPR’s engagement with all master trust plans in preparation for authorization and supervision. It is the first time TPR has used enforcement powers for the failure to provide members with SMPIs, failure to report breaches of law to TPR; and failure to have three trustees on a master trust.

“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,” Nicola Parish, TPR’s executive director of Frontline Regulation, said in a release. “The good governance of pension schemes is closely linked to good outcomes for members.”

TPR said the trustee has resolved the breaches, paid the penalty, and the plan has triggered its exit from the master trust market.

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Tags: Link Pension Trustees Limited, McDonalds, Pension, The Pensions Regulator, UK

A new proposition from the Securities and Exchange Commission (SEC) could help private equity firms carry out their business practices while improving the information that investors receive regarding the acquisition and disposition of businesses.

“The proposed rules are, first and foremost, intended to ensure that investors receive the financial information necessary to understand the potential effects of significant acquisitions or dispositions,” said SEC Chairman Jay Clayton. “The staff’s work to eliminate unnecessary costs and burdens of the current rules—which in some cases have been significant and frustrated otherwise attractive transactions—while at the same time improving the disclosures investors receive should be applauded.”

The proposals, in aggregate, intend to improve the degree and quality of financial information regarding target companies and ones they are looking to divest, reduce the typical complexity and cost to prepare these disclosures, and facilitate more timely access to capital.

To do this, the SEC laid out their proposition, which among many other things, would decrease the amount of financial statements of acquired businesses to cover up to the two most recent years rather than three, clarify when financial statements and pro forma financial information are required, amend the pro forma financial information requirements to improve the content and relevance of such information, and clarify when financial statements and pro forma financial information are required.

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The proposals are now subject to a 60-day public comment period before moving forward in the approval process.

Private equity investors are subject to some of the best returns in institutional investors’ portfolios, in large part due to their flexibility when working with portfolio allocators through separately managed accounts and co-investment vehicles.

Of note, the Alaska Permanent Fund Corp.’s newly minted Chief Investment Officer Marcus Frampton spoke with CIO on the lucrative nature of these private investments, where he and his team were able to generate five-year annualized returns surmising higher than 60%.

The SEC’s propositions can also help out other large institutional investors that are actively investing in the space, including the Washington State Investment Board which recently committed more than $2 billion to the asset class, and the Teachers’ Retirement System of Texas, which carried out a huge $600 million commitment to Blackstone’s latest flagship private equity fund.

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Tags: Alaska Permanent Fund Corporation, Jay Clayton, Private Equity, SEC

TPR Fines McDonald’s Franchisee Trustee for Breach of Pension Law

The SEC’s Newest Proposals Would Make Private Equity a Bit Easier on the Eyes