Defined Benefit  

Opperman contradicts McVey on new pension rules

Opperman contradicts McVey on new pension rules

The minister for pensions and financial inclusion said new legislation coming from the defined benefit (DB) white paper won't be "necessarily retrospective," which contradicts what the secretary of state for work and pensions said.

Speaking yesterday (21 May) in Parliament, Guy Opperman was questioned by Jack Dromey, shadow pensions minister, if Carillion's directors would go to jail under the proposed changes to the law.

The Department for Work & Pensions (DWP) published in March its 76-page defined benefit white paper, which 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, also gives The Pensions Regulator (TPR) powers to disqualify company directors, and introduce new punitive fines.

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Mr Opperman said: "I look forward to working with the honorable gentleman as we steer the defined benefit white paper into legislation, but the legislation is looking at the future - it is not necessarily retrospective."

This contradicts what secretary of state for work and pensions Esther McVey said before.

Speaking in Parliament in March at a hearing of the Work & Pensions and Business, Energy & Industrial Strategy committees on Carillion, Ms McVey said there are some penalties announced in the paper that could be applied to past events.

At the time, Ms McVey didn't specify which fines she was referring too.

Mr Dromey also questioned Mr Opperman about the regulator’s role in the Carillion collapse.

It is expected that 11 of Carillion's pension plans will ultimately end up in the pensions lifeboat, with the vast majority of these already in assessment at the Pension Protection Fund (PPF).

After unsuccessful talks with its lenders and the UK government, Carillion made an application on 15 January to the High Court for compulsory liquidation.

Last week (May 16), the two parliamentary committees published their joint report on the company collapse, which concluded that The Pensions Regulator made "hollow threats" and "failed in all its objectives" during its engagement with the collapsed contractor.

Mr Opperman said: "It was a Labour government who created The Pensions Regulator in 2004, and I think we can all agree that there are lessons to be learned from Carillion and other recent high-profile cases.

"However, there are two options. We either try to discredit an organisation and run it down or - this is my choice - support the regulator, give it the further powers that we set out in detail in the defined benefit pension schemes white paper and stress that the vast majority of employers do right by their employees."