Partner Jane Kola comments in Pensions Expert in relation to the industry facing a trustee exodus due to TPR’s new powers
The Pension Schemes Act has afforded the Pensions Regulator (TPR) with the ability to prosecute two new criminal offences: failing to recover debt, and action (or inaction) that reduces the chance of members receiving their benefits in full.
Jane Kola, in a Pensions Expert podcast, commented that TPR was caught “between a rock and a hard place” as it is able to issue guidance but not to address flaws in legislation.
However, Jane argued guidance so far has been: “too lightweight, especially for schemes and employers who are suffering some form of financial distress”.
Jane commented further:
“Financial distress does not mean insolvency, it means that the risk of insolvency is high and unless decisive action is taken insolvency becomes inevitable,”
“There is no time to dither in such situations, and for decisions that are made there is still a fair chance of failure. We now have laws where it may actually be better to let a company that could have had a chance of survival fail, with the defined benefit scheme ending up in the Pension Protection Fund.”
“That cannot be right, especially as we come out of the pandemic with many once-strong businesses having to fight hard to recover.”
Read Jane’s comments in Pensions Expert.
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