TPR finalises criminal offences policy and consults on further powers
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The Pensions Regulator has published its policy on how it will use controversial new criminal powers that come into force on Friday and can lead to up to seven years in prison. It is also consulting on its approach to other new powers it has been given.
Case studies aim to provide clarity
The two new criminal offences, avoidance of employer debt and conduct risking accrued scheme benefits are coming into force at the start of October, alongside other powers which were introduced with the Pension Schemes Act 2021. The new powers for TPR were a response to corporate scandals involving BHS, Carillion and others.
TPR’s policy on its approach to the new offences follows a six-week consultation which received 49 responses. TPR’s response to that consultation has also been published.
David Fairs, TPR’s executive director of regulatory policy, said: “These new powers will give us more options to punish wrong-doers, but we hope their existence will be a deterrent in themselves."
He added: “We made clear in our consultation that we would not use these powers in a way that targets ordinary commercial activity but only for the most serious examples of intentional or reckless conduct. We listened carefully to the feedback received and throughout the policy document, the examples and case study it now includes, we have strived to provide greater clarity to our regulated community," he said.
The policy published today includes a case study illustrating how the regulator expects to consider use of its new criminal powers, as well as identifying some common scenarios where it would not usually expect to consider use of these criminal powers.
During the summer, TPR also consulted on the circumstances in which new tests in relation to its Contribution Notice power will be used. The employer insolvency test and the employer resources test introduce two additional ways in which TPR can assess the impact of an act for contribution notice purposes.
TPR outlines approach to further new powers
Apart from the new criminal powers and contribution notice tests, the Pension Schemes Act 2021 has introduced high fines of up to £1m and expanded powers relating to the gathering of information, many of them also taking effect from Friday.
TPR is now publishing another, new consultation, with three draft policies explaining its approach to:
- Overlapping powers – where TPR has the options to pursue both criminal and/or regulatory powers in respect of the same set of circumstances.
- Monetary penalty powers – the ability to impose high fines related to information requirements and avoidance related scenarios.
- Information gathering powers – the use of section 72 notices, the new interview power and broader inspection power, in the context of enforcement cases, including TPR’s approach to the new fixed and escalating penalty powers for non-compliance.
Erica Carroll, TPR’s director of enforcement, said: “As well as our criminal powers, the Act gives us a package of other measures that allows us to better investigate areas of concern and deter and punish wrongdoing, all part of our role to protect savers. Our consultation on our criminal powers policy allowed us to listen to the industry and make changes. I therefore encourage industry to engage in our second consultation on our three further policies so we can have a rich and diverse set of views.”
The consultation closes on 21 December. TPR plans to finalise these policies early in the new year.
