SNP proposes amendments to criminal offences outlined in Pension Schemes Bill

Scottish National Party (SNP) MPs have proposed amendments to the Pension Schemes Bill to try and avoid the risk of criminal offences included in the bill punishing routine behaviour.

The offences in question have led to concerns from the pensions industry that the broad definitions of who may fall foul of the new rules could lead to well-meaning professionals being punished or nervous to take action when an employer is struggling.

In the bill’s current draft, the offences will criminalise actions that result in the avoidance of employer debt or that materially affect the likelihood of accrued scheme benefits being received by members without “reasonable excuse”.

SNP MPs, Neil Gray and Richard Thomson, have proposed replacing the lines “the person did not have a reasonable excuse for doing the act or engaging in the course of conduct” in clause 107, with “the person neglected to act in accordance with their duties and responsibilities”.

They explained: “[These amendments] are intended to avoid the risk that routine behaviour by parties involved with pension schemes and others would be judged criminal, and thereby to protect professional advisers from criminal liability for carrying out their role.”

Gray also proposed an amendment that would allow workers to redirect occupational scheme contributions to other pension accounts, such as self-invested personal pensions.

Additionally, four SNP MPs, including Gray and Thomson, proposed inserting a clause to enable trustees to “exercise discretion not to pursue” section 75 employer debt following an employer’s exit from a pension scheme where the debt is below a 'de minimis' threshold.

Work and Pensions Committee chair, Stephen Timms, proposed an amendment to require pension schemes to send The Pensions Regulator (TPR) information on the diversity of their trustee board.

Furthermore, Timms, alongside four other MPs, proposed inserting an amendment that would prescribe conditions about the results of due diligence undertaken in relation to a transfer request, such as to determine that the statutory right to a transfer is not established if specific ‘red flags’ are identified in relation to the transfer or intended receiving pension scheme.

Labour MPs Jack Dromey, Seema Malhotra, Karen Buck and Florence Eshalomi proposed a number of amendments relating to the pensions dashboards.

These were to add information to dashboards on schemes’ performance against environmental, social and governance (ESG) targets, the individual’s state pension age and any changes to it, and the total cost of charges incurred for the administration and management of the scheme.

The Labour MPs also proposed that the Secretary of State must lay a report before parliament on the operation and effectiveness of the public dashboard service before any commercial pensions dashboards can operate.

The bill is currently being considered by a Public Bill Committee, which will scrutinise the bill and is expected to report to the House of Commons by 5 November 2020 before the bill proceeds to the report stage.

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