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Deputies and pension experts have welcomed government plans to introduce long prison terms for rulers who recklessly manage pension funds, to avoid the repetition of recent scandals like BHS or Carillion .
Amber Rudd, Secretary of Labor and Pensions, said the current fines were not enough and that a new criminal offense would be introduced to punish "willful or reckless behavior" related to a pension scheme, threatening to "kill" people. unlimited fines and prison terms of up to seven years. for the worst offenders.
She told parliament Monday that the new measures "show that the Conservative government is on the side of workers who save for their retirement" and that "we will protect their income from irresponsible behavior."
More than 10 million people are now registered in occupational pension plans.
Rudd, a former banker and corporate executive at JP Morgan, said, "For too long, few rash players who have played fast and loose with people's futures have escaped without restraint. Acts of astonishing arrogance and abandonment are punished only by fines, which hardly burden the bank balances of the chiefs.
"Meanwhile, the workers who did what was needed and saved for their retirement, confident that their investments were safe, are facing a leaner life later. That can not be fair, and that is why, for the first time, we are going to criminalize deliberate or reckless retirement behavior. "
In the Sunday Telegraph, Rudd added that victims of such misconduct "would take a diary and read that the fat cat that sneaked you in a private jet to make it luxury. It is the injustice that makes the situation so exasperating. "
BHS, the retail chain formerly owned by Sir Philip Green, collapsed in April 2016 with a deficit of 571 million pounds sterling. He had sold the chain a year earlier for £ 1.
The billionaire subsequently agreed to pay £ 363 million to the pension fund as part of a settlement with the pension regulator, which concluded that Green's "main purpose" in selling the large store was to avoid taking responsibility for the scheme.
Frank Field, an independent MP who chairs the committee on work and pensions, said that Rudd "deserves great credit for his problem solving so early in his term, while others do not. have not acted for so long. " He added that the new law should be applied retrospectively.
"You generally have to avoid hindsight in the law, for good reason. But the actions of greedy leaders like those of BHS and Carillion have torn the plans of thousands of people for the future. In such exceptional circumstances, should the arm of the law not be able to penetrate the past to obtain justice for those who have lost so much? "
Tom McPhail, head of retirement policy at the Hargreaves Lansdown Investment Department, also praised the new measure, but called for the inclusion of defined contribution plans.
"After all, if deliberately underfunding a defined benefit pension plan becomes a criminal offense, why not do the same? We know that the standard contribution rates for these defined contribution plans are not enough to fund a decent retirement for many employees. "
McPhail said the new criminal offense could have repercussions, such as increased pressure on dividends from companies with a large pension deficit, which could affect the price of their shares.
The measure could also accelerate the move away from defined benefit plans, encouraging employers to finance them at an adequate level, close them and liquidate them.
Rudd warned the company's executives, "If you are managing your corporate retirement with huge and unsustainable debts, we come for you.
"If you play your employees' future on risky investments that put a pension plan in jeopardy, we come for you. And if you poorly manage a retirement plan and it disappears, we will come and get it. "
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