UK - Ministers have denied any U-turn on controversial Pensions Bill clauses which bosses fear will curb investment in British firms.
The clauses are designed to prevent companies “dumping” problems on the Pension Protection Fund by making others linked to the plan sponsor, including venture capitalists and directors’ families liable for scheme deficits.
But groups, including the British Venture Capital Association, the Society of Turnaround Professionals, R3, and the Confederation of British Industry fear the measures are too wide-ranging.
They claim the proposals will prevent financially troubled companies from securing the capital needed to turn their business around bankrupt venture capital organisations and leave individual directors and their family members personally liable for pension scheme deficits – even if they are not directly involved in the scheme.
Pensions minister Baroness Hollis of Heigham told the House of Lords the government recognised concerns over the controversial “moral hazard” clauses and would hold talks during the summer.
But the department for work and pensions said it had not suspended the clauses nor had it agreed to amend them.
Baroness Hollis said: “I would like to say now that we do recognise and acknowledge these concerns and we wish to respond to them in as constructive a way as we can.
“We are sympathetic to the concerns that have been raised and we will be working on this further over the summer in consultation with industry groups.”
She added that the provisions were not intended to “collar” insolvency practitioners and the consultation exercise would look at ways of “allaying” their concerns.
Field Fisher Waterhouse head of pensions law Belinda Benney said the provisions needed to be changed because they drove a “coach and horses” through the Companies’ Act, Enterprise Act and Insolvency Act.
However, Association of Pension Lawyers litigation committee chairman Giles Orton (pictured) doubted whether the clauses would be altered dramatically.
“The DWP are listening but I do not expect them to move. They do need something along these lines to protect the PPF. I don’t expect them to opt out entirely.”
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