Govt confirms extended TPR powers will not apply retrospectively

The government has confirmed that additional powers for The Pensions Regulator (TPR) outlined in part 3 of the Pension Schemes Bill will not be applied retrospectively, and are expected to be available to TPR by autumn 2021.

In response to a parliamentary written question, Pensions Minister, Guy Opperman, also confirmed that TPR will provide guidance on the use of the new criminals sanction powers, although it will first undertake an industry consultation on this.

He stated: “Subject to parliamentary processes, the Pension Schemes Bill should gain Royal Assent in due course.

"TPR will be producing guidance on the use of the new criminal sanction powers and it plans to undertake a consultation first with industry to ensure these vital views are captured.

“There are also other powers in part three of the bill that require implementing regulations and the aim is for these powers to be available to TPR by autumn 2021.

“None of the provisions in part three of the bill will be retrospective and the new criminal sanctions and information gathering powers will apply to all schemes where the act occurs, or in the case of a series of acts commences, after the powers come into force.”

The potential for retrospective application of the powers had sparked concerns within the industry, with LCP warning that a retrospective effect could have allowed the regulator to look to events that happened as far back as 2015, prior to the government setting out its initial proposals.

Considering this, LCP partner and head of research, David Everett, has welcomed the latest confirmation from the government, emphasising that corporate decision makers should not be in a position of facing new penalties for actions taken in the past.

However, he warned that further guidance on how the powers will be used, and specifically on how having a “material impact” on pension scheme funding will be defined, is still needed.

Everett stated: “The ministerial statement is very welcome news and is consistent with how previous powers in this area were introduced.

“What is disappointing is that there is no undertaking that the regulator will provide guidance on the new Contribution Notice tests. But it will surely need to, in order to explain when certain ‘materiality’ provisions of the legislation are likely to operate”

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