Defined benefit pensions review could propose penalties for company bosses

Defined benefit pensions review could propose penalties for company bosses

Prime Minister Theresa May’s plans to crack down on reckless behaviour that puts defined benefit pensions at risk are “essential” to scheme security, the Pensions and Lifetime Savings Association (PLSA) has said.

The government is planning to release a whitepaper on defined benefit pensions this week, and a crackdown on company bosses is expected following the high-profile collapse of Carillion.

New rules will be introduced to protect pension schemes when companies go under, and penalise directors who are guilty of mismanagement, according to The Observer.

Graham Vidler, director of external affairs at the PLSA, said: “We welcome the prime minister’s proposals to crack down on reckless behaviour which puts defined benefit pensions at risk. 11 million people depend on defined benefit for their future income and a focus on protecting the security of those pensions is essential.”

“As well as introducing criminal sanctions we’ll be looking to the forthcoming whitepaper to strengthen and clarify the Pensions Regulator’s powers and to help more schemes take advantage of the opportunities of consolidation.”

Carillion went bust earlier this year, with just £29 million in reserve. Reports subsequently claimed that the outsourcing company’s board rejected a bid to inject £218 million into its pension scheme, which was left with a deficit of £1 billion.

Categories: News, UK Pensions

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