The UK’s pensions industry has welcomed the government’s pledge to give new powers to the pension regulator to tackle defined benefit pension mismanagement.
In a white paper the government proposed giving the regulator the ability to impose significant fines, undertake enhanced information-gathering exercises and introduce an increased oversight regime.
In addition a new criminal offence of neglecting pension responsibilities will be introduced for businesses that are deemed to be abusing or avoidance pension scheme responsibilities.
Marian Elliot, managing director of integrated actuarial at investment consultants Redington said that the new powers were positive but cautioned that there was “potential concern” about how well-resourced the regulator was to use them effectively.
She added: “Anti-avoidance powers could have unintended consequences for corporate transactions and reasonable corporate restructuring. It will be important to ensure that these new measures do not have an adverse effective on legitimate business activity.”
Tom McPhail, head of policy at Hargreaves Lansdown, said the government was looking to facilitate scheme consolidation.
He said: “If we can end up with fewer, bigger, better run schemes then all stakeholders including members, regulators and employers are likely to benefit.”
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