UK - Independent trustees are urging pension funds to avoid any transfer deals with the Brand New Carpet Company, a firm which offers members cash for pension transfers.
Capital Cranfield Trustees - which was appointed as independent trustee by OPRA to wind up the Liverpool-based firm's pension scheme - claims that firms should be weary of the deal offered by Brand New Carpet Company.
Andrew Benke, chairman of Capital Cranfield, said that the Brand New Carpet Company is currently placing ads in national newspapers offering cash deals for members who transfer out of their scheme.
The offer is targeted at early leavers who then join Brand New Carpet Company as nominal employees, at which point their pension is transferred over. After a short period, this is given to the employee as a cash lump sum in return for a fee to the company.
Benke said the scheme had been given Inland Revenue approval and he believed the likelihood was that trustees would grant transfers requested by their members. He said: It is a pension scheme that is advertised as a way of liberating people’s transfer value.
However, Benke added: When we started to look at it we discovered that it wasn’t all it appeared on the surface.
Hammond Suddards Edge solicitor Francois Barker believes the Brand New Carpet Company's actions are probably in breach of section 91 of the Pensions Act 1995 which prohibits members from assigning their benefits.
Eggar Trustees director Vernon Holgate advised scheme administrators to check that the employer contracted out number (ECON) or scheme contracted out number (SCON) is correct before making a transfer.
The Brand New Carpet Company's registered office is care of Liverpool-based law firm Norton & Co. It has no other branches. Solicitors at Norton & Co refused to comment.
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