PENSION POT PANIC
If a scheme seems too good to be true, chances are it isn’t all it’s cracked up to be
Financial worries or just looking for better value for money? Consumer champion Fergus Muirhead can help
QA FEW years ago, I consolidated a few pensions I had with an old occupational scheme into one pension. I was then persuaded to transfer this pension, worth just under £300,000, into a pension with a company called Incartus. I’ve now had correspondence from a company called Dalriada telling me that Incartus are no longer trading, my pension was invested in some high-risk assets and that my money may be at risk. I’ve been in contact with Dalriada by phone but keep getting the company line, “It’s all in hand and you will be notified shortly”. I’ve also tried to speak to Incartus but keep getting told to speak to Dalriada. I’m not sure what’s going on and I’m concerned as there is a lot of money at stake. Can you help? Robert Johnstone (name changed by request)
AYOU were unfortunate in your initial communication with Dalriada, the pension scheme trustees you were advised to contact. I found them very helpful and they certainly made it easy for me to understand what was going on with your pension.
It’s also worth clarifying that Dalriada are actually still trading. However, they are not accepting new funds and as you read further, you will see they need to be trading if you are going to get your money back.
It’s not a pretty situation and I’d like to make other readers aware of this case as a means of making sure they understand exactly what investments are being proposed by any new pension venture they are considering.
Pension schemes are allowed to invest in a variety of different investments and most use a mix of different assets such as equities and property, cash and government bonds.
Incartus promised you a return on the scheme’s investment of eight per cent per annum, and that’s why you transferred to this scheme from the pensions you already had.
To generate this annual interest payment to the scheme, Incartus made their own investments in property and overseas oil and gas ventures.
A proportion of the assets backing the loans made by the schemes are therefore in tangible real property and the remainder is underpinned by more speculative investments in the oil and gas ventures.
The regulators became interested
in the Incartus scheme as they did not believe that investing all of the scheme’s assets in corporate loans to a single company is an appropriate investment strategy for an occupational pension scheme as it involves a lack of diversification of scheme assets and exposes members to reliance on the performance of a single corporate entity.
Incartus have indicated they wish to repay the loans in full with interest and a contribution to the costs of running the schemes via a combination of selling off the property portfolio and using the anticipated returns from the oil and gas ventures.
Neil Copeland, from Dalriada, is hopeful they will reach a compromise in this case that will help members.
He said: “Dalriada are not yet in a position to calculate member benefits for a number of reasons. Given the nature of the investments made, we can’t guarantee at this stage the amount which Incartus will return to the schemes, or when they will make the repayments by.
“As noted above, Incartus are behind with the repayment of the funds due to the schemes in line with the timescale they originally predicted and we can’t settle benefits to some members if there remains a risk that repayment in full will not be received as this would be unfair to those members who have not had their benefits settled. We appreciate this uncertainty is unsettling for members but we are working with Incartus to try and ensure members funds are fully secured at the earliest opportunity.
“If members have any queries about the position with regard to the schemes we would be grateful if you would ask them to contact us on 028 9041 2002 or by post at Dalriada Trustees Limited, Linen Loft 27-37, Adelaide Street, Belfast BT2 8FE.”