TPR won't hesitate to use new powers when it's 'right thing to do'

The Pensions Regulator (TPR) has said it “won’t hesitate” to use new criminal sanction powers, gained from the Pensions Act 2021, to protect savers through enforcement “when it is the right thing to do”.

A blog post penned by TPR executive director of regulatory policy, analysis and advice, David Fairs, argued that doing so would “punish wrongdoers and deter others” but added that the regulator would not “overstretch the intent and purpose behind the powers”.

The Pensions Act made it a criminal offence for professionals to exhibit action or inaction that results in either the avoidance of an employer debt to a defined benefit (DB) scheme, or a material reduction to the chance of members getting their DB benefits in full.

Some in the pensions industry have raised concerns that the TPR's guidance on how it will use its new criminal sanction powers was worryingly "vague".

Fair acknowledged that there had been industry speculation that these new offences might lead competent trustees to leave their posts in fear of being prosecuted, but stated that he had seen “no substantive evidence of this and competent trustees should have no reason to resign”.

He continued: “I’ve seen hotly imagined scenarios stemming from the implementation of our powers as well as debate about where the lines are drawn. The Institute of Chartered Accountants of Scotland aired concerns that the new powers could 'potentially catch' normal behaviour.

“The minister has made it quite clear the intent is not to achieve a fundamental change in commercial norms or accepted standards of corporate behaviour in the UK. Many scenarios that are presented to us focus on a particular act, but the power requires intent, an act and the absence of a 'reasonable excuse'. Together, those represent a high bar.”

Fairs recommended that anybody who remained concerned get involved with TPR’s ongoing consultation regarding how the organisation would investigate and prosecute based on these powers.

He then reiterated that TPR was “not in the business of making the lives of competent and responsible trustees, advisers or employers, or anyone operating in this space, harder”, stating that the regulator had “the interests of savers at heart and we remain focused on making workplace pensions work”.

Fairs concluded: “We won’t be targeting acts pre-dating the offences coming into force, and nor will we be making rash decisions. We will remain a balanced, proportionate and risk-based regulator. We will maintain a quick, clear and tough approach. We will work with, not against the pensions industry.

“The Pension Schemes Act pulls together and clarifies many pre-existing elements of policy, law and practice. In short, it is not a piece of legislation to be feared, except by the minority of wrongdoers. Rather, it will deter wrongdoers from doing wrong, and will allow us to prosecute those who knowingly do harm to savers. That is something we can all welcome.”

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