5 July 2021
R&I update – July 2021 – 3 of 6 Insights
The Pension Schemes Act 2021 introduces two new criminal offences in the context of defined benefit pension schemes:
The offences will not apply when a person has a "reasonable excuse".
The Pension Regulator's (TPR) draft Guidance on how it plans to use the criminal powers, and examples of what it would consider a "reasonable excuse", have helped to ease some concerns. Further clarity on the scope of the offences and other issues is still needed, though.
The provisions are expected to come into force by 1 October 2021 and it has been indicated, would not be retrospective in their effect. However, the draft Guidance states that TPR will look at evidence pre-dating the commencement date when assessing acts or failure to act which happened after that date.
While there is no clearance procedure regarding the criminal offences, clearance can be obtained from TPR against the risk of a "contribution notice" or "financial support direction" being issued which could provide a possible "reasonable excuse". All those involved in any way with a DB scheme need to be fully aware of the new powers, consider the risks of any relevant business activity and seek advice.
To discuss the issues raised in this article in more detail, please reach out to a member of our Restructuring & Insolvency or Pensions teams.
by Mark Chan