An HR manager who overstated the value of board members’ pension holdings by up to £13.4m has become the first person to be banned from being a trustee of a pension scheme.
The employee of telecoms firm Ericsson, David John Foster, was last week judged as “unfit to perform the role” of trustee by the Pensions Regulator.
As chairman of the trustees of the Ericsson Employee Benefits Scheme, Foster lied to senior managers about the transfer value of executives’ pensions. He falsely claimed that their benefits accrued at a rate of 1/30th of their final salaries per year and they were entitled to receive full benefits from the age of 50.
Foster also gave himself an “extremely favourable” second pension, according to the regulator.
June Mulroy, the Pensions Regulator’s executive director of business delivery, said: “David Foster abused the huge responsibility of trust invested in him by Ericsson, and let down the members of the pension scheme.
“It is only right and proper that he has no further involvement as a trustee of any pension scheme.”
The regulator’s determinations panel found Foster had failed to identify or handle conflicts of interest arising from his role as chairman of the corporate trustee and as HR manager.
He excluded other trustee directors from major decisions, and kept them in the dark about the financial impact of his plans on members.
Foster resigned as HR manager in September 2005. Ericsson was able to recover all the money that was transferred out of the scheme after a whistleblower’s report was sent to the regulator.
An Ericsson spokesman said: “Had this continued, it would have been a very big problem. But the company acted promptly, and no money left the scheme. We are confident staff will not suffer any consequences.”