Tougher terms mean that bosses could face up to seven years imprisonment if they mismanage employee pension schemes, work and pensions secretary Amber Rudd has warned.
Rudd wants to introduce a new offence of “wilfully or recklessly” mismanaging funds after updated plans last year imposed a possible maximum sentence of two years in prison.
It was the failures of BHS, with a £500m deficit in its pension scheme, that prompted a government review of the pension law. Sir Philip Green, who sold the company for £1 in 2015, later agreed to pay £363m towards the £571m pension deficit to end actions against him by the Pensions regulator.
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”
The proposed new law, still requiring Parliamentary approval, would mean that courts would be given the power to hand out unlimited fines for mismanagement of pensions.