The Pensions Regulator (TPR) will get new powers to be more proactive in its investigations, the new secretary of state for work and pensions revealed.
Speaking in parliament yesterday (22 January), Esther McVey said the watchdog will get new guidelines after the publication of its defined benefit (DB) white paper, expected in the spring.
She said: “Following the publication of the white paper, we will introduce new regulation to ensure that the regulator gets the information it requires to conduct investigations and casework effectively and efficiently.
“It remains the case that the government support free markets, enterprise and businesses, but this has to be conducted responsibly.”
These new rules could include the introduction of “punitive fines for actions that harm a pension scheme”, as pointed out in the government’s DB green paper, published last February, Ms McVey said.
The details of these fines, also mentioned in the government’s manifesto, “would be worked through with all the relevant stakeholders, but it would represent a significant strengthening of the deterrent,” she added.
She said: “We also intend to make certain corporate transactions subject to mandatory clearance by The Pensions Regulator, but we must take care to ensure that these measures do not have an adverse effect on legitimate business activity and the wider economy.”
The Department for Work and Pensions (DWP) received 800 responses to the DB green paper, which are now being reviewed, Ms McVey said.
She added: “When we bring forward new powers, it is vital that they are workable, that they have strong, secure footing and that they are affordable.
“We are looking at that as we review how to introduce stronger legislation.”
Yesterday’s session in parliament was motivated by prime minister Theresa May remarks, who said on Sunday (21 Januaury) that the government will stop company bosses from profiting while putting their workers’ pensions at risk.
Questioned about Carillion’s collapse - which led to the rescue of the business' DB pension schemes by the Pension Protection Fund (PPF) – Ms McVey argued that the case is under investigation.
“The regulator already has the power to look into anti-avoidance measures and enforcement, which could be utilised” to bring executives to account, she said.
Carillion has 13 final salary schemes in the UK with more than 28,500 members, and a deficit of £587m at the end of July.
Seven pension funds have already entered a period of assessment at the pensions lifeboat, which have around 5,900 members, a spokesperson at the PPF said.
After unsuccessful talks with its lenders and the UK government, Carillion made an application last week (15 January) to the High Court for compulsory liquidation.
The accountancy firm PwC has been appointed as administrator.
Carillion, which employs about 43,000 people, has been struggling for several months, issuing a profit warning last year that sank its share price – which has fallen from more than £2 a year ago to about 14p on Friday 19 January, before it entered administration on 15 January and trading in its shares were suspended.