East Renfrewshire MP, Paul Masterton, has welcomed new UK Government proposals which will give workers who are members of defined benefit pension schemes the assurances they need that their future retirement savings are safe when a company fails.
Plans included in the White Paper “Protecting Defined Benefit Pension Schemes” will make it a criminal offence to neglect pension responsibilities and could see businesses hit with fines or even prison sentences if they fail to meet their duty.
The proposals have been introduced after a wide-ranging consultation with workers, employers and the pensions industry and comes in the wake of the BHS and Carillion collapses.
Under the changes the Pensions Regulator will be given more powers to get the information they need quickly. Tougher penalties will be introduced, including hefty fines and criminal convictions for those who “wilfully or recklessly” put the financial future of employees at risk.
Paul Masterton, East Renfrewshire MP said: “Businesses need support to ensure they can grow and prosper but they also have a responsibility to their employees to meet their pension promise.
“I am delighted Government listened and is introducing penalties for companies that neglect their duties to their pension schemes. Hopefully this will act as a deterrent to businesses and reassure workers that the Government is taking action to protect their pensions.”
Secretary of State for Work and Pensions Esther McVey, added: “Up and down the country the vast majority of employers are doing the right thing and acting in the best interests of their staff.
“But we have seen what can go wrong; therefore we will clamp down on and – where appropriate - punish directors who wilfully or recklessly put pension schemes at risk. It is right that those responsible face tougher sanctions and we need to make sure that the Pensions Regulator has the powers in place to act swiftly when action is needed.”