Actuary receives £65,000 fine from FRC due to misconduct

According to the settlement agreement published by FRC on Wednesday, Richard Jones provided ongoing actuarial advice to Guinness Peat Group, now known as Coats, while also advising company executives who were trustees of three defined benefit pension schemes of subsidiary companies of the group. 

According to the FRC, the sponsor’s approach “regarded purely financially, favoured minimising contributions to the schemes in order to maximise the profits of the company”.

Over the same period, Jones received information and documents that were confidential to the trustee bodies of the relevant schemes, despite the obvious conflicts of interest, the FRC added.

It is clear from the settlement agreement that Jones did not act dishonestly nor did he stand to gain any benefit (financial or otherwise) from his actions and never sought any such benefit

Punter Southall Group

Jones also did not ensure that the disclosure of this information had been properly authorised.

The FRC stated that Jones’s conduct was contrary to the impartiality and compliance principles of the Actuaries’ Code, formerly the Professional Conduct Standards.

The settlement detailed that Jones is to receive a severe reprimand and pay a fine of £100,000. 

However, this will be discounted by 35 per cent to £65,000, since Jones’s conduct was not dishonest and that he did not benefit financially as a result, the regulator said.

The FRC also took into account Jones’s good disciplinary record, his contrition for the misconduct, and his full co-operation during the course of the investigation.

The fine is to be paid over a period of 24 months commencing from the date upon which the agreement takes effect. 

Jones was in a senior position — first as a senior consultant and then as a principal for eight years — and led the actuarial advisory services provided by Punter Southall to the trustees. 

He is currently managing director of Stoneport Pensions, a consolidation vehicle for small DB schemes launched in October by Punter Southall. 

According to the settlement, the misconduct involved failing to comply with the requirements of the professional standards that applied to Jones from time to time during the relevant seven-year period, in that his “objectivity and impartiality can reasonably be seen to have been compromised by his continuing to advise the said executives, despite the above risks of their conflict of interests”, the settlement stated.

No material loss for members

The schemes had approximately 30,000 members of the three subsidiary companies. There is no evidence to suggest that the misconduct caused the members any direct loss, but it had the potential to increase the risk of loss.

In all the circumstances, the misconduct could undermine confidence in the standards of conduct of actuaries and in the profession generally, the FRC stated.

In response to the FRC announcement, a spokesperson for Punter Southall Group highlighted that “the matters this relates to took place between 2005 and 2012, within Punter Southall Limited, prior to our sale of the business three years ago”.

The spokesperson added: “It is clear from the settlement agreement that Jones did not act dishonestly, nor did he stand to gain any benefit (financial or otherwise) from his actions and never sought any such benefit. Furthermore, the agreement recognises that there is no evidence to suggest that his actions caused the members of the schemes involved any direct loss.”

Angus Samuels, chairman of Punter Southall Group, said: “Richard has accepted this settlement agreement and I have every confidence that, as a consummate professional of real integrity, he will be able to remediate past conduct concerns and continue to develop his career with us. 

“The board of Punter Southall Group has assured Richard of its full support and we look forward to continuing to work with him for many years to come.”