White paper to be announced this week; Pensions neglect to become criminal offence

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A new criminal offence of neglecting pension responsibilities will be announced in a pensions white paper this week, the prime minister has confirmed.

Reports in The Telegraph and The Observer said Theresa May has pledged the tough new measures would safeguard staff from "irresponsible" executives who risk their workers' future financial security without fear of the consequences.

Announcing the proposals, May said it was "absolutely vital" that people who worked hard and contributed to society throughout their career should have "confidence" that their pension would be secure in retirement.

"I am committed to making sure our economy works for everyone - backing businesses to create good jobs but stepping in to make sure they play by the rules," she continued.

"That's why my government is making sure The Pensions Regulator has the powers it needs to crack down on the minority of businesses who shirk their responsibilities.

"The action we are taking will ensure that the majority of responsible employees, employers and pension schemes will no longer have to bail out the irresponsible few."

Dodging or abusing pension responsibilities will be made a crime under the plans and the regulator will be given powers to intervene earlier when problems are suspected.

The Insolvency Service will also be given extra powers to help protect employees and small suppliers from reckless company directors.

Echoing May's comments, work and pensions secretary Esther McVey said: "We will clamp down on and - where appropriate - punish directors who wilfully or recklessly put pension schemes at risk.

"It is right that those responsible face tougher sanctions and we need to make sure that the Pensions Regulator has the powers in place to act swiftly when action is needed."

The Pensions and Lifetime Savings Association backed the move. Director of external affairs Graham Vidler said: "We welcome the prime minister's proposals to crack down on reckless behaviour which puts DB pensions at risk. 11 million people depend on DB for their future income and a focus on protecting the security of those pensions is essential.

"As well as introducing criminal sanctions we'll be looking to the forthcoming White Paper to strengthen and clarify the Pensions Regulator's powers and to help more schemes take advantage of the opportunities of consolidation."

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