DWP launches first in a series of consultations on better protecting defined benefit schemes
In March this year the Government announced a number of initiatives to better protect defined benefit schemes. A White Paper “Protecting Defined Benefit Pension Schemes” was launched to review the whole DB system, in particular focusing on options for scheme consolidation, funding standards and strengthening the powers of the Pensions Regulator. This latest White Paper is the first in a series of consultations and looks at measures to strengthen the powers of the Regulator.
The consultation asks for comments on potential legislation and powers intended to make it easier for the Regulator to intervene when employers or trustees do not comply with statutory obligations or when employers attempt to avoid pension liabilities.
In addition, new powers will enable the Regulator to sanction individuals and companies where necessary. Key issues for comments are:
- improving the Regulator’s and Trustees’ role in corporate transactions, including a review of the notifiable events framework;
- deterring and punishing wrongdoing by sponsoring employers and directors through an improved sanctions regime, potentially including increased fines and criminal sanctions. Respondents are asked to comment on the type and level of sanctions that may be appropriate in different scenarios;
- how the Regulator’s existing powers to issue Contribution Notices and Financial Support Directions could be improved to better provide financial support for schemes and to require companies to compensate schemes where they have caused loss or detriment.
The deadline for submissions to the consultation is 21 August 2018 and the White Paper can be found here.