The Pensions Regulator could be granted powers to apply fines retrospectively, the secretary of state for pensions announced today (21 March).
Speaking in Parliament at a hearing of the Work & Pensions and Business, Energy and Industrial Strategy committees on Carillion, Esther McVey said there are some penalties announced in the defined benefit (DB) white paper, published on Monday (19 March), that could be applied to past events.
Ms McVey didn't specify, however, which fines she was referring too.
The defined benefit white paper sets out a series of new measures for the regulator "to undertake a tougher and more proactive role".
Besides creating new legislation to introduce a criminal offence to punish those found to have committed wilful or grossly reckless behaviour in relation to a pension scheme, the government is also giving the watchdog powers to disqualify company directors, and introducing new punitive fines.
The government will also consider if the introduction of a targeted mandatory clearance process for specific corporate transactions is necessary in the coming months.
Ms McVey said: "We are already strengthening the actions that the regulator can take. That is happening straight away.
"There are some finer points that need some further consultation to make sure that we get it correct.
"But those other things, as soon as we have time on the floor to make that primary legislation, we will do it."
Asked by Labour MP Frank Field, chairman of the Work & Pensions select committee, if the new rules would have prevented a case such as Carillion, Ms McVey argued no one can "categorically state what would or wouldn't have happened" with the contractor company.
She said: "But what we do know in bringing this white paper forward is that it will enhance as best as possible the protection of pension schemes and pensioners.
"Should anybody do anything to weaken or recklessly put their pension scheme into difficulty, then those people will get penalties or a criminal sanction for what they have done."
Carillion's defined benefit pension schemes, one of the UK government's biggest contractors, are all either in the retirement fund of last resort, the Pension Protection Fund (PPF), or will soon enter it.
The company has 13 final salary schemes in the UK with more than 28,500 members, and a deficit of £587m at the end of July.
After unsuccessful talks with its lenders and the UK government, Carillion went into liquidation in January.
Carillion, which employs about 43,000 people, had 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 14.2p just before it went into administration.
maria.espadinha@ft.com
