TPR language prompts uncertainty over retrospectivity of criminal sanction powers

Language in The Pension Regulator’s (TPR's) latest consultation could raise questions as to the retrospectivity of new criminal sanction powers, prompting “considerable uncertainty” for pension schemes, industry experts have warned.

The government previously confirmed that the powers would not apply retrospectively, with Pensions Minister, Guy Opperman, stating in response to a written question that “none of the provisions in part three of the bill will be retrospective”.

Despite this, the latest TPR consultation has suggested that the regulator may consider looking back past the date of Royal Assent of the Pension Schemes Act in February 2021 or further, particularly in relation to evidence of intention.

The draft policy stated: “Evidence pre-dating [commencement date - 1 October 2021] may be relevant to our investigation/prosecution of actions after that date, for example if it indicates someone’s intention."

Industry experts have warned that this could risk creating considerable uncertainty for pension schemes, advisers, sponsors and anyone involved who may be caught in the scope of these new, much wider powers.

“The question of retrospectivity continues to cause real uncertainty around the criminal offences,” stated Arc pensions law managing partner, Rosalind Connor.

She continued: “When the idea of a new criminal offence was first mooted, ministers seemed to imply that it might cover acts and omissions from the date of the White Paper, but as recently as January 2021 ministers were quite clear that the new powers would not apply retrospectively.

“Although the guidance isn’t looking at the 'offence' itself retrospectively, in practical terms TPR is suggesting that what has already happened may be a driving force for the use of its powers, which might be considered just retrospectivity by another name”.

Adding to this LCP principal, Laura Amin, emphasised that whilst “no-one wants to protect people who purposefully set out to undermine pensions”, the legal position needs to be “clear” to ensure that all parties involved with a scheme know the risks they face.

“The latest TPR guidance opens up the possibility of an open-ended investigation into past actions by companies, advisers and trustees, all of which could be used to support a criminal prosecution,” she added.

“It is vital that when the guidance is finalised this ambiguity is removed and that the commitments made in parliament by ministers that these powers will not apply retrospectively are honoured”.

Commenting in response, a TPR spokesperson said: “The government has stated that the new criminal offences will not have retrospective effect.”

A Department for Work and Pensions (DWP) spokesperson said: “We have been very clear there will be no retrospective use of new criminal powers in the Pension Schemes Act.”

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