The watchdog took enforcement action after money was taken from Dundee packaging firm Discovery Flexibles Limited (DFL) despite its pension scheme, Danapak Flexibles Retirement Benefits Scheme (DFRBS), having a significant deficit.
As a result of TPR’s enforcement action, which included a ruling published this week (4 August) by the Upper Tribunal, a body which reviews decisions by TPR, a total of approximately £2,550,000 will be paid into the scheme.
Gaucho Rasmussen, TPR’s Executive Director of Regulatory Compliance, said: "The pensions system relies on employers with defined benefit schemes doing the right thing by their savers – and the vast majority do. But when things go wrong, mechanisms are in place to alert us. And when savers are at risk, we act to put things right. This case demonstrates our commitment to protecting savers and preserving the integrity of the pensions system. It also shows that we remain open to engagement and settlement where it delivers good outcomes for schemes. Importantly, it highlights that even when an employer remains in business, we will intervene where necessary to safeguard pension benefits."
Case background
DFL, which has supplied packaging to household brands, was bought by Thomas Christopher Wrigley, known as Chris, and his wife Elizabeth Wrigley for £1 in 2008. The business was sold to its current owners for the same amount in 2019.
Following concerns being reported to the regulator by the scheme’s independent trustee, TPR investigated and concluded that between 2008 and 2019 money had been extracted from the firm while its pension scheme was in deficit. This, TPR argues, caused material detriment to the scheme.
To help plug the scheme’s deficit, TPR sought payments by way of contribution notices from Chris Wrigley, Elizabeth Wrigley, Chris’s brother, Robert Paul Wrigley, known as Paul, and his sister Elizabeth Ann Pelgrave, known as Ann.
In October 2023, Chris Wrigley and Elizabeth Wrigley agreed to pay £2 million into the scheme in settlement of TPR’s regulatory action against them.
Paul Wrigley paid £222,482.83, the amount TPR’s Determinations Panel determined his contribution notice should be, which was formed of £217,353.16 plus interest. Ann Pelgrave was issued with a contribution notice for the same amount but referred the matter to the Upper Tribunal.
Upper Tribunal decision
The Upper Tribunal ruled that Ann Pelgrave should pay £245,749 plus interest of approximately £85,000. The decision, combined with money already paid to the scheme, means millions will be paid to the scheme via its trustees.
Read the Upper Tribunal's judgement. (It was published in full on 4 August and 'released' on 1 August).
As well as being chief executive of Discovery Flexibles, Chris Wrigley was also chair of trustees of DFRBS until TPR moved to protect the scheme, banning him from acting as a trustee in December 2017 and appointing independent trustees Pi Consulting. In November 2018, Chris Wrigley was convicted of refusing to give information to TPR after he repeatedly refused to comply with TPR’s requests for information in connection with an investigation into how the scheme was being run. TPR referred his refusal to provide information to the Crown Office and Procurator Fiscal Service, responsible for prosecutions in Scotland, where the offence occurred. He pleaded guilty at Dundee Sheriff Court to a charge of failing or refusing to provide information to TPR without good excuse and was fined £400.
DFRBS is a relatively small closed defined benefit scheme with 209 members as at 31 March 2024. According to valuations as of 31 March 2023 it had a technical provisions deficit of £10.5 million, a section 179 deficit of £7.5 million and buyout deficit of £13 million. Its trustee is now Pi Consulting.
Discovery Flexibles Limited dates to 1866, when manufacturing began at the Wellfield Works site in Dundee under William Fergusson & Sons, producing jute. By the 1950s, the company was owned by Low & Bonar and began printing and bag making in 1955. The company underwent several name changes becoming Bonar Flexible Packaging in 1989, Bonar Teich Flexibles in 1990, Teich Flexibles UK in 1997, and Danapak Flexibles UK in 2002. In 2008, it entered private ownership and was renamed Discovery Flexibles Limited. The business has provided packaging for major international businesses.
The Pensions Regulator is the regulator of work-based pension schemes in the UK. Our statutory objectives are to:
protect members’ benefits
reduce the risk of calls on the Pension Protection Fund
promote, and improve understanding of, the good administration of work-based pension schemes
maximise employer compliance with automatic enrolment duties
minimise any adverse impact on the sustainable growth of an employer (in relation to the exercise of the regulator’s functions under Part 3 of the Pensions Act 2004 only)
|
