// Longer prison terms to be introduced for bosses who mismanage pension funds
// Work and pensions secretary Amber Rudd said that current penalties aren’t enough
MPs and pension experts have accepted government plans to introduce longer jail sentences for bosses who mismanage pension funds, in an effort to avoid a repeat of scandals like BHS.
Work and pensions secretary Amber Rudd said current penalties weren’t enough and that this new criminal offence, which threatens unlimited fines and up to seven years in prison, would punish “wilful or reckless behaviour” relating to a pension scheme.
Rudd will tell parliament today that the new measures “show that the Conservative government is on the side of workers saving for retirement” and that “we will protect their incomes from reckless behaviour”.
Over 10 million people are now enrolled in workplace pension schemes.
Rudd said: “For too long the reckless few playing fast and loose with people’s futures have got away scot-free.
“Acts of astonishing arrogance and abandon punished only with fines, barely denting bosses’ bank balances.
“Meanwhile, workers who have done the right thing and saved for retirement, confident their investments were safe, are left facing a leaner later life.
“That cannot be right, which is why, for the first time, we’re going to make wilful or reckless behaviour relating to pensions a criminal offence.”
Rudd told the Sunday Telegraph that victims would “pick up a paper and read that the fat cat who fleeced you is boarding a private jet, living it up the lap of luxury. It’s the injustice that makes it so maddening”.
In April 2016, BHS which was owned by Sir Philip Green for 15 years, went into administration with a £571 million pension fund deficit.
Green had sold the retailer in March 2015 for just £1.
The Arcadia tycoon later agreed to pay £363 million into the pension fund in a settlement with the pensions regulator, which found that Green’s “main purpose” in selling the department store was to avoid liability.
Work and pensions committee chair Frank Field MP said Rudd “deserves huge credit for stepping in to sort this so early in her tenure, where others have so long failed to act”.
“Retrospection in the law is usually to be avoided, and for good reason. But the actions of greedy bosses like those at BHS and Carillion have torn apart thousands of people’s plans for the future.
In such exceptional circumstances shouldn’t the long arm of the law be able to reach into the past, to gain justice for those who lost so much?”
Rudd warned company executives: “If you run your company pension into the ground, saddling it with massive, unsustainable debts, we’re coming for you.
“If you gamble your employees’ futures on risky investments that put a pension scheme at risk, we’re coming for you.
“And if you chronically mismanage a pension scheme and it goes under, we’re coming for you.”