Bosses who are reckless with their employees’ pensions could be jailed for up to seven years, Amber Rudd has warned.
The Pensions Secretary said “wilful or reckless behaviour” relating to a pension scheme will become a criminal offence and could lead to an unlimited fine.
Writing in The Sunday Telegraph, she warned those judged to be guilty of such a crime: “We’re coming for you.”
Ms Rudd said: “To curb these freelancers playing fast and loose with your cash, I am going to make ‘wilful or reckless behaviour’ relating to a pension scheme a criminal offence, with jail terms of up to seven years for the worst offenders.
“We’ll also give the courts powers to levy unlimited – yes, unlimited – fines. So 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.”
Frank Field, the chairman of the Commons work and pensions committee, said: “The Secretary of State deserves huge credit for stepping in to sort this so early in her tenure, where others have so long failed to act.
“But most people would be aghast to hear that this law doesn’t already exist. How could it ever have been legal for company bosses to recklessly or wilfully or risk their workers’ pensions?”
The Government launched a consultation last summer as part of moves to beef up the powers of the Pensions Regulator, enabling it to step in more quickly and more often when companies make changes that could damage the pension scheme.
Ms Rudd’s pledge follows the BHS pensions scandal. A year after it was sold by Sir Philip Green for £1 in 2015, the store chain collapsed into administration, leaving a £571 million pension deficit. Green later agreed to pay £363 million towards it to end action against him by the Pensions Regulator.
Treasury Chief Secretary Liz Truss backed Ms Rudd’s proposals, saying it was wrong that Green could “play merry hell” with pensions.
“It’s about saying it’s not acceptable to play merry hell with the contributions workers have made over a period of time and essentially run off without making good the pensions you promised to those people in the future, and so we’ll take further sanctions,” she said.