The Pensions Ombudsman has ruled in favour of one of a pair of brothers in a dispute over a small self-administered scheme (SSAS).
Richard and Terence Whyte owned equal shares in Whyte's Print Finishers and were the only members of its associated SSAS. They acted as its trustees along with Rowanmoor.
The retirement age from the scheme was 65 with provision for early retirement from 50 with the consent of the company and trustees.
In 2006 in preparation for the A-Day rules Rowanmoor wrote to Richard Whyte's financial adviser to tell them the scheme rules would have to be changed to comply with A-Day regulations, particularly to allow the payment of 25% pension commencement lump sums.
Richard Whyte agreed to the rule change, but Terence Whyte claimed he could not because there were legal proceedings between them about the ownership of the company. Terence said Richard was excluding him from the management of the firm and that a shadow director was buying out his share.
The company went into compulsory liquidation in May 2008, meaning there was no principal employer for the scheme and that it had to be wound up.
The brothers began a Deed of Settlement in May 2008, which stated that Terence would relinquish his claims to the company and any pension benefits provided he was paid £50,000.
However, the Deed of Settlement was never executed as the scheme could not pay the severance because it would constitute an unauthorised payment, leading to another breakdown of negotiations between the brothers.
In November 2009, Terence told Rowanmoor he wished to take his pension at 50, as by April 2010, the minimum pension age would rise to 55. He believed his benefits should be based on £78,000, which he claimed was the value of the print machinery owned by the SSAS and cash within the scheme, plus £15,348 in machinery rental payments owed to the scheme.
However, Rowanmoor said unless the scheme rules were updated by both brothers, Terence Whyte's PCLS would be limited. It also said they must update the machinery's rental agreement and agree the machinery's value. Despite requests from Rowanmoor, Richard Whyte refused to change the rules or agreements, or allow Terence to transfer his benefits out.
Pensions Ombudsman Tony King said Terence Whyte was "at great disadvantage" because of his brother's refusal to change any scheme rules.
King said Richard Whyte also failed to cooperate with Rowanmoor in assessing the value of the scheme assets.
King did not have the power to impose a fine on Richard Whyte, but ruled the total asset value of the scheme was £164,431, based on an actuarial statement, of which Terence Whyte is entitled to half.
Follows McVey's resignation
Schroders and Aviva Investors
LightTower Partners, Seneca Partners and Unicorn AM
Integration with Money Dashboard
View from the front row