Company directors could face fines or jail time for flouting pension rules
Unscrupulous directors who play fast and loose with their company pension scheme could face time in prison and unlimited fines under new measures tabled by the government today.
A consultation was launched today by minister for pensions and financial inclusion guy Opperman which will impose harsher penalties for directors who deliberately or recklessly put funds at risk.
If it's passed, the measures will give the Pensions Regulator (TPR) more power to intervene when companies make decisions that may damage defined benefit (DB) pension schemes.
The government said that though the system worked well and most company managers followed the rules to provide their members with a pension, there were still areas for improvement.
"The government's position on defined benefit pensions is clear: Where an employer can, they must continue to meet their responsibilities," Opperman said.
"Millions of people across the country rely on defined benefit pension schemes to support them during their retirement.
"That's why we are committed to introducing a range of new measures which support the Pensions Regulator to be clearer, quicker and tougher.
"This is an opportunity to strengthen defined benefit pensions' protection for the long term, and it is extremely important we get the changes right."
The consultation is set to run until 21 August. It follows recent news that the Pensions Regulator said it was considering issuing a "contribution notice" which could force former Carillion directors to pay back the remainder of the collapsed company's pension liabilities directly.
Other notable pension collapses include the demise of BHS and its former boss Philip Green who was last year forced to fork out £363m in cash to rescue the company's scheme after it was thrown into doubt when he sold the company for £1 to former bankrupt Dominic Chappell.