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March 21, 2023

DAC Pensions declared in default

DAC Pensions was declared in default by the Financial Services Compensation Scheme on March 16th 2023.

The pension provider, which also traded as Davies & Co and DAC SIPP, was formerly known as Davis & Co SSAS Solutions Ltd and DAC SSAS.

The firm was placed into voluntary liquidation in August 2021.

There are reportedly 482 claims against DAC, four of which have been rejected. However, one claim was upheld which enabled the declaration of default against DAC Pensions. The remaining claims are still being processed.

DAC Pensions SIPP

The latest update from the FSCS says that it is aware that an overseas IFA recommended many DAC Pensions customers to transfer their existing pensions into a DAC Pensions SIPP.

Following the transfer, many customers had their pension funds placed in high-risk, non-standard investments. Some of these investments have since become illiquid and unredeemable meaning they can’t currently be sold or traded.

The FSCS advises customers that in order for it to be able to pay claims it must prove that DAC Pensions Ltd failed in its due diligence

It said: “…in other words, did DAC Pensions Ltd do certain checks on the non-standard investments that would hold their customers’ pension funds, before accepting them into its SIPP investment portfolio? Did it make sure they were appropriate for a SIPP, and did it identify any potential issues with them? Also, if it did identify potential issues, did it tell customers?”

FSCS Investigations into DAC Pensions

The FSCS has been investigating DAC Pensions since September 2021 when it announced it was “investigating the matter urgently”

In February 2023 it confirmed it had finished its investigations which it said had mainly focussed on the due diligence undertaken by DAC prior to accepting business from introducers. These were Elliot Lloyd International (formerly Walker Murray) based in Ireland, and Woodbrook based in Cyprus.

The FSCS said at the time that: “We have had to fully consider the activities and permissions of these EEA introducers…FSCS usually expects customers who were introduced by a ‘live’ FCA-authorised firm to make a complaint against that firm before submitting a claim to FSCS. We are aware Elliot Lloyd International appear to be a live firm. But we believe it is unable to meet claims against it. So, customers who were introduced to the DAC SIPP through Elliot Lloyd International can submit a claim to FSCS without first pursuing a claim against Elliot Lloyd International.

 

The FSCS confirmed that claims against DAC Pensions are being assessed by its processing teams on a “case-by-case basis, to determine whether each customer is eligible for compensation.” It added that “FSCS is now able to pay valid claims and we will begin to issue decisions to customers.”

Important Information!

You are not required to use our services to pursue your claim. You can also seek further advice or shop around subject to any time limits within which a claim must be made.

It is possible for you to present the claim for free, either to the firm or person against whom you wish to complain or to the statutory ombudsman (Financial Ombudsman Service or Pension Ombudsman Service) or the Financial Services Compensation Scheme, whichever is applicable to your claim.