DWP consults on new powers for regulator
The Department for Work and Pensions (DWP) has launched a consultation on its proposals for new and enhanced enforcement and investigation powers for the Pensions Regulator (TPR).
The online consultation, open from June to August 2018, builds on the DWP’s earlier proposals for TPR reform in its White Paper on Protecting Defined Benefit Pension Schemes.
The DWP proposes change in three areas:
Increased corporate transaction oversight
New ‘notifiable events’ which companies must notify to TPR, including the sale of a ‘material proportion’ of a pension scheme’s sponsoring employer and any ‘pre-appointment’ insolvency or restructuring advice. It also proposes bringing forward the notification ‘trigger’ to the point where heads of terms are agreed, even if subsequent contractual negotiations are being undertaken.
New civil and criminal penalties
Increasing the maximum civil fine for serious breaches of pension regulation from £50,000 to £1,000,000, and a new criminal offence of “wilful or grossly reckless behaviour” in relation to a pension scheme.
Reforming the ‘Moral Hazard’ regime
Simplification of the current process for imposing financial support directions on sponsoring employers, with decisions taken more quickly, on a broader range of actors, in a more easily enforceable way
It is clear from the consultation that recent high-profile pensions cases– such as BHS, Carillion and British Steel – and adverse media publicity have convinced the Government that further powers are required for TPR to function effectively. Responses to the consultation are now being analysed, with legislative changes expected to follow in the coming months.