Webb: Lobby peers now to avoid jail risk being written into law

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Former pensions minister Sir Steve Webb has called on trustees to lobby peers for an amendment to the pension schemes bill urgently if they are to reduce the risk of a prison sentence for anyone involved in pension scheme decision-making. 
Speaking at the Association of Member Nominated Trustees’ Winter Conference on Monday, Webb, partner at consulting firm LCP and a former LibDem minister for pensions in the 2010-2015 coalition government, said the current version of the pension schemes bill contains a “risk of you all being sent to jail” and called on trustees to lobby the House of Lords to change the wording of the bill.  
Clause 107 in the bill concerns the sanctions that would be incurred not just for avoiding an employer debt but also for an “offence of conduct risking accrued scheme benefits”. 
This includes anything “that detrimentally affects in a material way the likelihood of accrued scheme benefits being received”, where “the person knew or ought to have known that the act or course of conduct would have that effect”, and “the person did not have a reasonable excuse for doing the act”. 
He said: “I suspect we’ve all done that, looking back – made decisions, and as a result of them, on balance, it turns out the benefits are less likely to be received." 
This wording is therefore too broad in its scope, he argued, inviting not just scheme sponsors but anyone involved in decisions around pensions, including trustees, regulators and government to be judged with the benefit of hindsight. It also risks deterring potential future trustees from the role and leading current trustees to take overly cautious decisions. 

White paper responses had questioned ‘wilful’ and ‘reckless’ 

The March 2018 white paper had referred to “wilful or reckless behaviour” in relation to pensions, and the last government repeatedly used these words in relation to the proposed bill. Based on this rhetoric and the fact the legislation was prompted by the failures that occurred within BHS, “you would assume that the legislation to implement this pledge has words like ‘wilful, reckless employer’. None of those words appear,” said Webb.  
He added that when challenged, “the government said, ‘Yes, but the courts are reasonable. The regulator is reasonable. We're only really after the bad guys.’ Well, put it in the blummin bill then”. 
Responses to the 2018 white paper had been divided precisely on the words ‘wilful’ and ‘reckless’, however, questioning how they would be defined, which might have contributed to the fact they have not been included in the proposed bill. 
The bill has already been debated in the House of Lords and is currently at committee stage. Baroness Sharon Bowles (LibDem) has since tabled an amendment to insert “wilfully, recklessly or unscrupulously” into the relevant sections, and Baroness Jeannie Drake (Lab), herself a pensions trustee, also said the clause was too wide. Other peers are however of the view that the law should be even tougher than the current wording. 
Webb insisted that the current version constitutes a risk and that an amendment is urgently needed. 
“The worry is, if we, you, don’t get this bill amended while it’s in the House of Lords, forget it. The government has a majority of 80 votes in the House of Commons. The government will win every vote in the House of Commons for the next five years,” he warned. 
The House of Lords is therefore the only place where the bill will be scrutinised effectively, he argued. 
“That clock is ticking,” he said. “Anything you can do individually, if you know peers... now is the only time to get any traction. If we don’t, this legislation will be on the statute book, and too many people will be at risk.” 

Should the pension schemes bill be amended to avoid putting trustees at risk? 

Simon Daniel
Julia Land
Lesley Browning
Tim Smith
Ian Neale