The Pensions Regulator (TPR) will be given new powers to fine employers who do not comply with workplace pensions rules, it has been announced.
The announcement comes after the Pension Schemes Bill received Royal Assent this February, enshrining it into law.
Strengthening protections for pension savers, the new legislation will see civil penalties increased to £1 million, while also introducing three new criminal offences.
These changes will be aimed at “bosses who run pension schemes into the ground”, “deter employers from making reckless decisions with their defined benefit schemes” and “strengthen the regulators’ powers to take efficient and timely actions to protect members’ hard-earned savings”, the Government said.
The new laws will also help savers by introducing the “pensions dashboard”. The digital platform will enable savers to easily access and review all of their pension pots in one place and learn how they can improve their retirement prospects.
In addition, the Pension Schemes Bill legislates for the creation of a new style of pension scheme, known as a Collective Defined Contributions (CDCs) scheme. According to the Government, “CDCs have the potential to increase returns for millions, whilst being more sustainable for both workers and employers”.
Welcoming the new laws, TPR Chief Executive, Charles Counsell, said: “The Act gives us new powers to act against unscrupulous employers and enhances our ability to gather information more efficiently, and to scrutinise how defined benefit pension schemes are funded and the actions that affect them.
“We will be clear in our expectations when talking to trustees, employers and others, and quick to take effective action where we have concerns. Trustees will be expected to demonstrate how their funding approach is prudent, appropriate and sustainable.”
Minister for Pensions, Guy Opperman, added: “This Act makes our pensions safer, better and greener, as we look to build back better from the pandemic. Its passage will reassure savers that they can, and will, have a retirement they deserve.”
The legislation comes after it was revealed that pensions enforcement activity had risen to record highs. According to TPR, the use of statutory powers between October and December 2020 increased by nearly 50 per cent compared to the previous quarter.
The regulator says automatic enrolment enforcement activity also rose significantly following the introduction of the Coronavirus Job Retention Scheme (CJRS).
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