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Optimum Retirement Benefit Plan Determination



The Determination  has now been published on our 'Previous Decisions' page. The case involved a referral from Dalriada Trustees Limited, the independent trustee appointed to the Optimum Retirement Benefit Plan (the Scheme) by The Pensions Regulator (TPR), on behalf of the Scheme’s membership, and an individual complaint made by a member.

The basis of the complaints is, in summary, that:

  • the Trustees failed in their duties to the Scheme, including failing to comply with statutory requirements, guidance from TPR and governance requirements;
  • the Trustees failed to operate the necessary controls to ensure the effective and transparent administration of the Scheme;
  • the Trustees failed to comply with their various duties, under statute and case law, concerning the investment of the Scheme’s assets, having invested the members’ funds in high-risk, unregulated, illiquid investments/assets that were inappropriate, resulting in material losses of members’ funds;
  • there was evidence that the Trustees had allowed or facilitated pension liberation under the Scheme; and
  • one of the Trustees, Mr Craig, personally profited from his position as a Trustee.

After a comprehensive investigation carried out by the Pensions Dishonesty Unit, the Ombudsman has upheld these complaints which involves directions to recover a total of £12,578,051.44.


The Scheme was established in June 2015, with Mr Craig as sole trustee and Optimum Financial Solutions Limited (OFSL), of which Mr Craig was a 60% shareholder, as the administrator. Two additional trustees, Mr Kelly and Mr Reilly were later appointed, in January 2017. Based on the Financial Conduct Authority’s (FCA) Register, OFSL did not have any permissions for pensions-related regulated activities. However, it received “commission” payments from the Scheme, amounting to over £1.3 million.

Approximately 288 members transferred a total of £13.4 million of pension benefits into the Scheme. Introducers had been hired, to increase the Scheme’s membership, and were paid over £600,000 by the Scheme.

After transferring to the Scheme, a number of members accessed a proportion of their funds by entering into loan agreements with companies, which included one that was owned by Mr Craig. Based on the applicable charges and interest imposed on the members, it is clear that those loans, some of which amounted to pension liberation, were made on unfavourable terms.

The investments made with Scheme funds were generally made in companies that: had only been incorporated a short while before the investments were made; were dormant; had been trading at a loss; and/or were companies in which one or more individuals involved in running the Scheme had, in some way, an interest. The investments were all high-risk, unregulated and illiquid, consisting of shares in, or loans to, the various companies. There is no evidence that due diligence was carried out or that ‘proper advice’, as required under the Pensions Act 1995, was taken in relation to any of the investments.


The Ombudsman upheld the complaints, finding that Mr Craig, Mr Kelly and Mr Reilly had committed multiple breaches of trust and many acts of maladministration, which have caused the loss of Scheme funds and have impacted Scheme members’ pensions. Included in this finding was facilitating a form of pension liberation.

The Ombudsman has directed

  • Mr Craig, Mr Reilly and Mr Kelly to repay to the Scheme on a joint and several basis £1,764,014.95, together with £19,545 for the independent trustee’s costs incurred in bringing its referral to TPO;
  • for Mr Craig to also pay the Scheme £10,740,471.49, and
  • in addition, for Mr Kelly and Mr Reilly to pay £29,510 and £24,510 respectively, in relation to the excessive fees charged during their respective terms of office as Trustees.

The Ombudsman has directed that simple interest at 8% per annum will be applied to each of the above payments, except the independent trustee’s costs.

What happens next?

The Applicants and Respondents have been notified of the Determination, which is final and binding, subject to appeal to the High Court on a point of law. The Ombudsman has shared the Determination with TPR and will notify the Solicitors Regulation Authority.


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