Between 2014 and 2017, £43 million has been reported as stolen from pensions. Since a lot of pension fraud goes undetected, £43 million is likely an understatement; some estimates suggest fraudsters could be behind up to £100 million of pension transfers in 2015-16 alone. The big numbers are appalling, but mask the personal gravity of the issue: vulnerable pensioners are losing their main source of financial support. The government has therefore committed to increase punishment for pension scheme mismanagement.
In the government’s 2018 White Paper Protecting Defined Benefit Pension Schemes, it outlined plans for The Pension Regulator (TPR) to receive a boost to its anti-avoidance powers – powers to act against an employer whose actions compromise pensioners’ benefits. The TPR will be empowered to
- Disqualify company directors who have acted recklessly with pensioners’ funds, and is considering legislation to make such reckless behaviour a criminal offence.
- Directly impose criminal sanctions for the ‘reckless’ offences as well as the more ‘established’ criminal offences relating to pensions; in the past it could only pass on evidence of illegal behaviour to another public body to apply criminal sanctions. This aims to speed up the resolution of serious cases and minimise the losses incurred by victims of an ongoing pension fraud.
- Ask a broader range of inquiring questions of those it demands an interview with; and no-shows to interviews will face fines. Previously, interview absence could only be charged criminally, which was expensive and time consuming; this change gives TPR more flexibility and leverage over the non-compliant.
This policy is ‘in progress’, and will be marked done when these powers are in place. The white paper itself confirms that “where legislation is required, this is unlikely to be before the 2019-20 parliamentary session at the earliest.” In the meantime we’ll keep tracking this, so follow this policy for updates.
Get the detail
- Pensions: Tougher jail terms for mismanaging funds – BBC
- White Paper, Protecting Defined Benefit Pension Schemes – Gov.uk
- Requirements for Master Trusts – Gov.uk