UK - The National Association of Pension Funds is leading an industry drive for changes to the Pensions Bill in the House of Lords.
The British Venture Capital Association and the Confederation of British Industries are also calling for sections of the Bill to be scrapped, which they warn could be “disastrous” for business.
The NAPF plans to lobby members of the Lords calling for sections 35, 39 and 40 of the Bill to be ditched. The clauses – added without industry consultation – could force company directors, shareholders and private equity firms to plug holes in the pension funds of firms they own or manage.
An NAPF spokesman warned that the additional sections – which affect defined benefit schemes and will be retrospective from June 11, 2003 – would “unintentionally” hit a large number of people.
He said: “We agree with government that employers should not shirk their responsibilities to pension arrangements but these clauses could come down hard on people, investors and firms which have acted legitimately.”
The aim of the clauses is to recoup money from company directors and owners who purposely disposed of cash which should have been put into a firm’s pension fund.
But the NAPF claims the legislation is not “clear cut” and would leave people, who have acted honourably, vulnerable to high pension bills.
In a letter to work and pensions secretary Andrew Smith, the BVCA warned that the Bill could expose private equity firms and company directors to “unlimited liability for shortfalls in pension provision”.
BVCA chief executive John Mackie said it could have a “disastrous effect” on the ability of the association’s members to raise capital for investment, particularly in the US.
The association – which represents 165 private equity firms – also claimed the department for work and pensions was not taking the concerns seriously and called for a “meaningful” discussion.
A CBI spokeswoman said the DWP had already been made aware of concerns and the confederation would continue lobbying for changes to the amendments.
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