A new criminal offence of ‘wilful or reckless behaviour’ in relation to pensions will be introduced by the government under the proposals to crack down on abuse of final or average salary schemes.
The planned legislation, and a recommended maximum sentence of seven years, is included in the government’s response to a consultation on enhancing The Pensions Regulator’s powers.
It comes as latest figures revealed more than 10 million people have been brought into workplace pensions saving by automatic enrolment since 2012.
The milestone confirms the success of the government’s flagship policy requiring employers to enrol eligible workers into a workplace pension scheme.
Minimum contribution rates under auto-enrolment are due to rise from 5% to 8% in April. The proportion stopping saving through automatic enrolment was just 0.7% in the three months following the April 2018 increase in contribution rates, compared to 0.6% for the 4 year period beforehand.
With record numbers investing in their retirement, the government is introducing a number of additional protections for savers, including a new authorisation regime to govern trusts administering pensions.
The Department for Work and Pensions has already unveiled pioneering proposals to facilitate industry to deliver ‘pensions dashboards’, providing all the facts and figures about someone’s pension savings in one place online.
Secretary of state for work and pensions Amber Rudd, said: "The vast majority of bosses take their responsibilities seriously and look after their workers’ retirement funds.
"However, for too long the reckless few playing fast and loose with people’s futures have got away scot-free. Acts of astonishing arrogance and abandon punished only with fines, barely denting bosses’ bank balances. Meanwhile workers who have done the right thing and saved for retirement, confident their investments were safe, are left facing a leaner later life.
"That cannot be right, which is why, for the first time, we’re going to make wilful or reckless behaviour relating to pensions a criminal offence."
