Pensions: Tougher jail terms for mismanaging funds

0

Following bosses could face up to seven years in prison if they mismanage hand pension schemes, says Work and Pensions Secretary Amber Rudd.

She lacks a new offence of “wilfully or recklessly” mismanaging funds.

Plans outlined decisive year for a maximum sentence of two years in prison were toughened up after patrons consultation.

Ms Rudd told the Sunday Telegraph the law will target “the compute few”. But one ex-pensions minister says civil, not criminal, action may be better.

Sir Steve Webb implied it could be difficult and time consuming to reach the higher burden of trial needed in criminal cases.

“If you run your company pension into the scope, saddling it with massive, unsustainable debts, we’re coming for you,” Ms Rudd express.

Ms Rudd said current rules mean that “acts of flabbergasting arrogance” by a few company directors are punished with fines “that not quite dent bosses’ bank balances”.

Under the proposed new law, which silence requires Parliamentary approval, courts would also be given the power to levy far-reaching fines for mismanagement of pensions.

‘Years away’

Nicola Parish, from The Allowances Regulator, said: “We welcome the proposed new powers which, as a package, see fit allow us to identify potential problems earlier and take more operative action.”

And Frank Field, chair of the Work and Pensions Committee, declared: “The Secretary of State deserves huge credit for stepping in to sort this so initial in her tenure, where others have so long failed to act… most child would be aghast to hear that this law doesn’t already abide.”

But ex-pension minister Sir Steve Webb said civil action could be more effectual.

Sir Steve, the former Liberal Democrat pensions minister in the coalition command, said that the criminal offence was “a good headline that chances achieving nothing or worse than nothing”.

He said it was difficult and potentially conditions wasting trying to show, under criminal law with its higher weight of proof, that bosses deliberately underfunded a pension scheme.

Sir Steve, now the man of policy at Royal London insurance firm, added: “This leadership was first floated before the last general election in 2017.

“Two years on, we set up not even had the primary legislation. We are years away from seeing this in require.”

Collapses

The failures of BHS, with a £500m deficit in its pension scheme, and the outsourcing class, Carillion, with an even bigger shortfall, prompted the government to regulate a review of pension law.

A year after it was sold by Sir Philip Green for £1 in 2015, the retailer floor into administration, leaving a £571m pension deficit.

Sir Philip coincided later to pay £363m towards it to end action against him by the Pensions Regulator.

Leave a Reply

Your email address will not be published. Required fields are marked *