TPR launches new consultation on criminal sanctions policy
New guidance on how The Pensions Regulator (TPR) will use its new criminal powers to investigate and prosecute those who avoid employer debts to pension schemes or put savers’ pensions at risk has been published today (11 March 2021) for consultation.
TPR has published the draft policy and a consultation on how it plans to use these criminal powers given to it by the Pension Schemes Act 2021.
Luke Hartley, Director, shares his thoughts:
“The draft guidance is helpful in that it sets out TPR’s understanding of their new powers and their purpose, a comparison with existing powers and the circumstances in which they might look to use them. It also provides reassurance that TPR won’t use its powers in some of the more ‘business as usual’ circumstances that may cause incidental harm to a pension scheme, such as a decision by a third party not to lend or the termination of a supplier contract.
“However, whilst clarifications over what constitutes a reasonable excuse are useful – for example adequate mitigation being provided, or the recognition that parties may act in their own commercial interests when electing not to pursue alternative options – significant grey areas remain, particularly around restructuring situations.
“Notably, the extent to which the viability and risk adjusted outcome of alternative outcomes must be considered and documented is largely unknown. Whilst the key ‘defences’ of a strong audit trail and early engagement with the trustees and TPR – with a view to reaching mitigation – are not always possible in restructuring scenarios, which require commercial decisions to be made, based on partial information. The continuing concern is that TPR’s additional powers will make otherwise beneficial deals too risky, leading to worse outcomes on average for members.
“Whilst these areas will no doubt be challenged in the consultation, for the time being the guidance leaves as many questions as it provides answers.”
The consultation will close on Thursday 22 April 2021.
Speak to Luke Hartley to find out more.
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