Pensions: Tougher jail terms for mismanaging funds

Category : UK News
Updated On : February 11, 2019 09:34 AM
By Indian Times Daily

Company bosses could face up to seven years in prison if they mismanage employee pension schemes, says Work and Pensions Secretary Amber Rudd. She wants a new offence of "wilfully or recklessly" mismanaging funds. Plans outlined last year for a maximum sentence of two years in prison were toughened up after public consultation.

Ms Rudd said the law will target "the reckless few". But one ex-pensions minister says civil, not criminal, action may be better. Sir Steve Webb said it could be difficult and time consuming to reach the higher burden of proof needed in criminal cases.

"If you run your company pension into the ground, saddling it with massive, unsustainable debts, we're coming for you," Ms Rudd said. Ms Rudd said current rules mean that "acts of astonishing arrogance" by a few company directors are punished with fines "that barely dent bosses' bank balances".

Under the proposed new law, which still requires Parliamentary approval, courts would also be given the power to levy unlimited fines for mismanagement of pensions. 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".

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