Response to consultation on defined benefit pension schemes published
A White paper, 'Protecting Defined Benefit Pension Schemes', which contained proposals for a range of reforms to support defined benefit (DB) pension schemes, was published by the government last March.
In June last year the Department for Work and Pensions (DWP) consulted on its DB White Paper proposals to strengthen the Regulator's powers. The consultation closed on 21 August.
A response to the consultation has now been published which provides, amongst other things, that:
- Two new criminal offences will be introduced; wilful or reckless behaviour in relation to a DB scheme punishable by seven years' imprisonment and/or an unlimited fine; failure to comply with a contribution notice, punishable by an unlimited fine.
- A new civil penalty of up to £1 million will be introduced for various offences which include failure to comply with the notifiable events framework, failure to comply with the declaration of intent requirements and knowingly or recklessly providing false information to the Regulator or the trustees.
- The government will consult on draft regulations to amend the notifiable events framework to introduce new employer-related notifiable events.
- The DWP will work with the Regulator and industry to identify where earlier notification of employer-related notifiable events could be more beneficial and consider how to implement any requirement.
The government will legislate to introduce a requirement for a Declaration of intent by a transaction's corporate planners that will be shared with the trustee board and the Regulator (which will be triggered by notifiable events such as the sale of a controlling interest in a sponsoring employer, the sale of the business or assets of a sponsoring employer, or the granting of security in priority to the scheme on a debt to give it priority over debt to the scheme).
This article is taken from HR Law - March 2019.