Vol 18 (2021) - Issue 3

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Pensions Regulator Outlines Scope of New Pensions Criminal Offences but Uncertainty Remains

Synopsis
The Pensions Regulator draft policy on its approach to investigating and prosecuting the new criminal offences to be introduced this Autumn under the Pension Schemes Act 2021 sets out:
– how the Regulator will select cases for investigation and prosecution
– the factors the Regulator will take into account in
assessing whether a person has a ‘reasonable excuse’ for their conduct
– examples of the circumstances in which the Regulator might bring a prosecution.

This guidance has been produced in response to concerns that have been expressed about the scope of the new offences which cover a wide range of corporate activity and which apply to any person (including directors, lenders, investors, trustees and advisers) who commits a relevant act or engages in a relevant course of conduct (other than an insolvency practitioner acting in their capacity as such).
However, the guidance contains mixed messages and creates unnecessary uncertainty. It also does not cover the new financial penalties of up to £1 million which the Regulator will be able to impose on any person in any even wider range of circumstances or the two new contribution notice triggers. Therefore, while it provides some clarity, the policy is unlikely to be sufficient to mitigate the negative impact of the new powers on corporate activity and investment and on the scope to restructure businesses with DB schemes.