Managing UK pensions risk: new Pensions Regulator powers and criminal offences
- Following the general election, the government has reintroduced the Pension Schemes Bill (the ‘Bill’) into Parliament.
- The Bill includes a number of provisions which will significantly impact corporate activity involving groups with a UK defined benefit pension scheme.
- Two new criminal offences of ‘risking accrued scheme benefits’ and ‘avoidance of employer debt’ are proposed, each carrying a maximum penalty of seven years in prison.
- The circumstances in which the Pensions Regulator (the ‘Regulator’) can make connected third parties (such as group companies, directors and major shareholders) liable for pension scheme deficits by issuing a ‘contribution notice’ will be significantly widened.
- There will be new requirements to give advanced notification and provide statements to the Regulator about the impact of certain corporate activity on a pension scheme, and failure to comply with these requirements could result in new civil penalties of up to £1m.
- The Regulator’s investigatory powers will be strengthened, and the Regulator will have a power to require any person to attend an interview and a power to inspect records at parties’ premises (including unannounced raids).
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