The Pensions Regulator announced the move against David John Foster, an Ericsson human resources manager, in a news release .Ericsson is a global telecommunications equipment and services provider that is based inStockholm, Sweden.
After being alerted to potential problems by a whistleblower’s report, the Pensions Regulator appointed an Independent Trustee to the Ericsson plan to secure funds and begin an investigation into Foster’s conduct, according to the announcement. The new trustee cancelled planned executive transfers and arranged to hold a second pension for Foster pending an inquiry. Two transfers worth Â£2.46 million, which had already been paid, were recovered by Ericsson.
According to the regulators, as chairman of the Trustees of the Ericsson Employee Benefits Scheme, Foster misrepresented the pension benefits of executive members to Ericsson senior management. The representations added as much as Â£13.4 million to transfer values, increasing pension liabilities of the final salary plan and the sponsoring employer, the officials said.
Foster falsely claimed that executive members’ benefits accrued at a 1/30th rate and were entitled to receive unreduced benefits from the age of 50 – a benefit level he said already existed. The regulators said, however, that such a move would have required approval from Ericsson.
Finally, according to the news release, Foster stands accused of also accepting for himself an “exceptionally favorable” second deferred pension, which had the potential to affect the benefits of other plan members, without informing or seeking approval from other trustee directors.
The panel also found that Foster had failed to properly identify and handle conflicts of interest arising from his roles as chairman of the corporate trustees and as human resources manager. Foster excluded other trustee directors from significant decisions and failed to interact with them to the extent that some trustees were neither aware of the existence of the executive scheme, nor of its financial impact.
Foster was appointed as a director of Ericsson Employee Benefits Scheme Limited in November 2002, and was chairman of the scheme’s board of directors between July 2004 and September 2005 when he resigned.
The actions for which Foster was disciplined took place between April 2004 and June 2005. The Pensions Regulator was alerted by a whistleblower’s report on July 1, 2005 and appointed an independent trustee on July 7, 2005.