The UK government has released a white paper outlining measures that would increase the powers of The Pensions Regulator (TPR), including giving the pension industry watchdog the ability to impose punitive fines.
“The pensions’ landscape is evolving, as defined benefit schemes continue to close and be replaced by other forms of provision,” said the white paper, which was released by The Department for Work and Pensions’ (DWP), and presented to Parliament. “We are managing this change so that the defined benefit system continues to work in the best interests of those involved,” it said, adding that it “supports the regulator’s ambition to be clearer, quicker, and tougher.”
The DWP said it will strengthen the regulatory framework, and the regulator’s powers to allow TPR to “punish those who deliberately put their pension scheme at risk by introducing punitive fines.”
It also said it would “legislate to introduce a criminal offense to punish those found to have committed willful or grossly reckless behavior in relation to a pension scheme and, build on the existing process to support the disqualification of company directors.”
The measures include improving the effectiveness and efficiency of the regulator’s existing anti-avoidance powers.
“We will work with the relevant parties to ensure that these measures do not have an adverse effect on legitimate business activity and the wider economy,” said the DWP. It also said it would legislate to give TPR the information-gathering powers already in place for automatic enrollment and master trusts to its defined benefit and defined contribution functions, “including the power to compel any person to submit to an interview, the power to issue civil sanctions for non-compliance, and an inspection power.”
Not surprisingly, TPR welcomed the proposed new powers.
“Planned improvements to our scheme funding, information-gathering, and anti-avoidance powers will enable us to be clearer about what we expect from employers,” said Lesley Titcomb, chief executive of TPR, in a release. “Furthermore, strengthening the notifiable events framework will improve our regulatory grip and will ensure we are sighted sooner on planned transactions that could pose a risk to scheme members.”
Titcomb said TPR will now work closely with the government to develop the proposals in the white paper, including fines and criminal sanctions.
According to TPR, one of the main aspects of the new powers is to set greater clarity around the existing funding standards. It said it will now start discussions with stakeholders about how this might work, including how to revise its defined benefit funding code of practice to set out its expectations of trustees and employers.
Tags: Pension, The Pensions Regulator, UK