New plans to increase penalties for businesses who threaten pension schemes
Directors who recklessly put workers’ pensions at risk will face sentences of up to seven years, or unlimited fines, under new plans announced by the Department for Work and Pensions (DWP).
A new criminal offence of ”wilful or reckless behaviour” in relation to pensions will be introduced under the proposals to crack down on abuse of final or average salary schemes.
The changes will help to ensure that the system is equipped for the challenge of a “continually evolving pension’s landscape” according to the Secretary of State for Work and Pensions, Amber Rudd.
The move is designed to ensure that businesses who allow deficits to escalate to unsustainable levels, or who endanger their workers’ savings through pensions mismanagement, will be held to account.
The proposals are included in the Government’s response to a consultation on enhancing The Pensions Regulator’s powers. New figures have revealed that more than 10 million people have been brought into workplace pensions saving by automatic enrolment since 2012.
Minimum contribution rates under automatic enrolment are due to rise from 5% to 8% in April as part of the Government’s plans to encourage more pensions’ saving.
As part of the proposal announced by the DWP, an unlimited fine will be levied against individuals who fail to comply with a Contribution Notice, issued by The Pensions Regulator requiring, a specified amount of money to be paid into the pension scheme by that individual.
It will also introduce a new civil penalty of up to £1 million for this offence.