On Monday, in its response to the consultation on protecting DB pension schemes and strengthening the Pensions Regulator, the Government confirmed its plans to:
- introduce a new criminal offence of wilful or reckless behaviour in relation to a defined benefit (DB) pension scheme (aimed at company directors)
- give the Pensions Regulator the power to issue fines of up to £1 million in these circumstances and for other breaches by corporate sponsors of their pensions obligations
- require corporate sponsors to notify trustees and the Regulator about proposed corporate transactions and re-financing and how they plan to mitigate any detriment to the pension scheme, and
- make changes to the Regulator’s existing anti-avoidance powers to make it easier for the Regulator to impose Contribution Notices and Financial Support Directions on corporate sponsors and on connected and associated parties.
These changes come in response to high profile corporate failures involving the likes of BHS and Carillion. Corporate sponsors need to take note of these new powers and the new notification requirements, particularly as the Pensions Regulator is adopting a tougher and more proactive approach to its oversight of DB schemes and its enforcement activity against corporate sponsors. Continue reading