Out-Law News | 18 Jan 2021 | 4:17 pm | 1 min. read
Criminal sanctions and information gathering powers to be granted to the UK’s Pensions Regulator (TPR) under proposed legislation will not be applied retrospectively, pensions minister Guy Opperman has confirmed.
The Pension Schemes Bill will give TPR new powers to hand out criminal sanctions to individuals involved with defined benefit pension schemes. The proposed new offences focus on avoidance of employer debt, and conduct risking accrued scheme benefits.
In response to a question asked by Labour MP Angela Eagle, Opperman said none of the provisions in the Bill relating to criminal sanctions or information gathering powers would be retrospective, and would apply only to acts which take place after the powers come into force.
Opperman said the aim was for powers requiring implementing regulations to be available to TPR by autumn 2021. He added that TPR would be producing guidance on the use of the new criminal sanction powers, and the regulator planned to carry out a consultation with industry to ensure its views are captured.
Pensions expert Jennifer Chambers of Pinsent Masons, the law firm behind Out-Law, said: “This confirmation is welcome news for those involved in M&A and restructuring activity who now have certainty that the decisions they take prior to the Bill becoming law will not be subject to retrospective action.
“While this conclusion was always likely, it is reassuring that this concern can now be taken off the watch list as part of current discussions,” Chambers said.
Pensions expert Cameron McCulloch of Pinsent Masons said the forthcoming consultation and other details would be key to help trustees and corporates understand how the legislation would affect them.
“This is very much just the first step. There is still uncertainty about how some of the new penalties in the Bill will operate in practice and as ever, the devil will be in the detail of the regulations and guidance which follow,” McCulloch said.
“Until that information is available, we are still second-guessing how the Bill will impact on corporate behaviour, although the serious nature of the penalties will certainty focus the minds of corporates where defined benefit pension schemes are involved,” McCulloch said.
The Pension Schemes Bill has passed through the House of Lords and House of Commons and is set for the so-called ‘ping-pong’ stage on 19 January, when the Lords will consider Commons amendments, ahead of the bill receiving Royal Assent.
Part 3 of the Bill concerns TPR’s powers, introducing the new offences of avoidance of employer debt and of conduct risking accrued scheme benefits, both in relation to occupational pension schemes. Those found guilty of either offence could face a fine or imprisonment for up to seven years.
The Bill also introduces new financial penalties for those failing to comply with notices from TPR or who provide false or misleading information to the regulator, trustees or managers.
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