The Department for Work and Pensions (DWP) is today (26 June) launching a consultation on new powers for The Pensions Regulator (TPR), which will include unlimited fines or a prison sentence for rogue bosses.
The new rules will enable the watchdog to get involved more quickly and more often when companies make changes which could damage the pension scheme.
In March the DWP published its defined benefit (DB) white paper, which 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 consultation will add more policy details and ask for views about how the proposals will work in practice, the DWP said.
According to Guy Opperman, minister for pensions and financial inclusion, the government’s position on DB pensions is clear – “Where an employer can, they must continue to meet their responsibilities”.
He said: “Millions of people across the country rely on DB pension schemes to support them during their retirement.
That’s why we are committed to introducing a range of new measures which support TPR to be clearer, quicker and tougher.
“This is an opportunity to strengthen DB pensions’ protection for the long term, and it is extremely important we get the changes right.”
Mr Opperman is expecting the new legislation on final salary schemes will come into law in 2019.
DWP is also expected to consult on consolidation in the DB sector later this year, as the white paper revealed plans to promote consolidation in this market, in which two thirds of the 5,600 schemes have funding shortfalls.