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New inquiry: Norton pension schemes and the Fraud Compensation Fund (FCF)

24 July 2023

The Work and Pensions Committee is to look at the lessons that can be learned from the experience of the collapse of the Norton pension schemes with the aim of ensuring members of collapsed pension schemes are better protected and supported in the future.

The assets in the Norton pension schemes were invested in the Norton Motorcycle Holdings Ltd which went into administration in 2020. The sole trustee of the schemes, Stuart Garner, was also the sole director of the company. Whistleblowers raised concerns with the Pensions Regulator (TPR) in 2013 and independent trustees were appointed in 2019.

In March 2022, Mr Garner was given a suspended jail sentence for illegally investing pension schemes’ money into his business. The independent trustee said in April this year that it expects to be able to recover a small proportion of the funds owed through the liquidation and bankruptcy processes. It is waiting to be able to make a claim to the Fraud Compensation Fund.

The inquiry will consider the Pensions Regulator’s approach to preventing loss of pension assets through fraud or dishonesty and whether there is scope to speed up the process of assessing eligibility for compensation and making payments. It will also examine the role played by bodies such as independent trustees, the Pensions Ombudsman, the Pensions Regulator, the Pension Protection Fund (in its role as administrator of the Fraud Compensation Fund).

Chair's comment

Work and Pensions Committee Chair, Rt Hon Stephen Timms MP, said:

“The collapse of the Norton pension schemes has caused a huge amount of worry and financial hardship for the members, who fear they have lost their pensions and have been left in limbo when it comes to whether they will receive any compensation at all.

“Our inquiry will look at the lessons that can be learned from this experience to ensure the right regulatory arrangements are in place both to protect pension rights better and ensure compensation is paid promptly when things go wrong.”

Terms of reference

The Committee would welcome submissions covering all or some of the following questions by Friday 27 October. The Committee would like to hear from Norton pension scheme members and plans to hold an event to discuss their experiences. Further information on how to register interest will be published shortly.

1. Does TPR have the powers it needs to prevent trustees acting dishonestly and in breach of their trustee duties, leading to the loss of pension scheme assets, as happened in the Norton case according to the Pensions Ombudsman;

a) Are the right regulatory arrangements to prevent a similar case happening again;

2. Could different regulatory arrangements have delivered a faster resolution of the Norton case, or a similar case;

3. How could co-ordination with other (non-pension) bodies be improved;

4. How could communications with scheme members of collapsed pension schemes be improved while at the same time protecting scheme assets;

5. How could the process for applying to the Fraud Compensation Fund (FCF) be simplified and sped-up; and

6. What claims might the FCF expect in future and are there schemes which might be eligible but do not have the support to make a claim.

Further information

Image credit: UK Parliament/Tyler Allicock