Bosses who mismanage pensions funds face seven years in jail under new powers dubbed ‘Philip Green laws’ set to be unveiled by ministers
-The new powers for the Department of Work and Pensions grant unlimited fines
-Sir Philip Green agreed to fork out £363m to save the BHS pension scheme
-There was a reduction of 18 percent in pension pots but no sanctions for bosses
-Amber Rudd has unveiled new powers to combat negligence towards pensions
Bosses who recklessly mismanage pension funds face seven years in jail under a clampdown due to be unveiled by Amber Rudd this week.
After public consultation, Rudd has decided to sanction seven year sentences and allow the courts to impose unlimited fines on corrupt bosses.
The move comes after a series of high profile business collapses, including BHS and Carillion, which left tens of thousands of people facing losing out on pensions they had contributed to for years. Rudd wrote in The Sunday Telegraph: ‘If you run your company pension into the ground, saddling it with massive, unsustainable debts, we’re coming for you
‘For too long, the reckless few playing fast and loose with people’s futures have got away scot-free. ‘Acts of astonishing arrogance and abandon by devil-may-care directors punished only by fines which barely dent bosses’ bank balances.’ She added: ‘Pursuing the reckless few lining their pockets at the expense of their workers will help build trust at a critical time for the pensions industry that is buoyed by a transformative saving culture.’
Plans outlined last year for a maximum sentence of two years in prison were toughened up after the public consultation. The new sentencing rules will have to be passed by Parliament before being made into law. Bosses will be liable to criminal prosecution rather than just civil penalties imposed by the Pensions Regulator.
Nicola Parish, from The Pensions Regulator, said: ‘We welcome the proposed new powers which, as a package, would allow us to identify potential problems earlier and take more effective action.’ But ex-pension minister Sir Steve Webb said civil action could be more effective.
Sir Steve, the former Liberal Democrat pensions minister in the coalition government, said that the criminal offence was ‘a good headline that risks achieving nothing or worse than nothing’. He said it was difficult and potentially time wasting trying to show, under criminal law with its higher burden of proof, that bosses deliberately underfunded a pension scheme.
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