Ferdy Lovett discusses the Pensions Bill and new powers for the regulator in New Law Journal
Ferdy Lovett, Partner, predicts increased activity ahead, despite the recent legislative void.
When Parliamentary time finally allows, the Pensions Bill is set to arm the Pensions Regulator (TPR) with hefty new powers and is scheduled to pave the way for a plethora of changes outlined below.
- Fresh additions to the ‘notifiable events regime’, the early warning system designed to alert TPR of possible calls on the pensions lifeboat, the Pension Protection Fund. For example, TPR will need to be notified of the sale of a ‘material proportion’ of the business or assets of a sponsoring employer which has funding responsibility for at least 20% of the scheme’s liabilities. The granting of security on a debt to give it priority over a pension scheme will likewise need to be notified.
- Despite concerns that it could delay transactions and deter buyers, a new requirement for sponsoring employers to produce a ‘declaration of intent’ (to be addressed to the scheme’s trustees and shared with TPR) prior to certain business transactions. Transactions in the frame here include the sale of a controlling interest in a sponsoring employer.
- Additional powers to sanction, including: a civil penalty of up to £1m for more serious breaches which have resulted in actual harm to a pension scheme, or have the potential to do so if left unchecked; a new criminal offence of ‘wilful or reckless behaviour’ in relation to a DB pension scheme, punishable by a maximum penalty of up to seven years’ imprisonment and/or an unlimited fine.
- Potential targets for the above penalties include sponsoring employers, any associated or connected persons and, in some instances, the trustees themselves.
Read the full article in New Law Journal.