Week ending 15 February 2019
New powers for the Pensions Regulator
The Department for Work and Pensions has published its response to a consultation on bolstering the Pensions Regulator’s powers, as it aims to help TPR become ‘clearer, quicker, and tougher’ by improving TPR’s oversight capabilities. Much of what had previously been proposed is to go ahead, although a lot of the detailed provisions are not yet known.
The DWP plans to ensure TPR has access to timely information to improve oversight of corporate activity by:
- extending the current notifiable events regime to include the sale of a business or assets and the granting of security ahead of the pension scheme, although the notifiable events regime will not cover the payment of dividends
- introducing a new requirement for sponsors to produce a “declaration of intent” when a change of control, sale of business or assets or the granting of security ahead of the pension scheme is to take place
- improving TPR’s existing anti-avoidance powers in relation to Contribution Notices and Financial Support Directions.
However, what hit the headlines this week was the DWP’s plan to introduce two new criminal offences, namely:
- up to seven years imprisonment and/or unlimited fines for the wilful or reckless mismanagement of pensions – this is aimed at senior executives who endanger their employees’ pension savings or allow DB scheme deficits to grow to unsustainable levels
- unlimited fines for the failure to comply with a Contribution Notice.
There will also be civil penalties of up to £1 million for a variety of other failures or behaviours.
No timescales have been given for implementation of these new powers (this will happen “as soon as Parliamentary time allows”) and much detail is still required.