Actuaries raise questions over government plans to reform DB pension schemes

Josh Mines
Members Of The New Coalition Cabinet Arrive For Their First Cabinet Meeting
The Association of Consulting Actuaries raised a number of questions around the government's proposed reform to defined benefit pension schemes (Source: Getty)

The Association of Consulting Actuaries (ACA) has warned MPs that creating a criminal offence for directors who "recklessly" handle defined benefit pensions schemes would do little to deter unscrupulous managers.

Following scandals with pension funds owned by companies including BHS, British Steel and Carillion, the Work and Pensions Committee set out a number of reforms to give The Pensions Regulator greater investigative and information gathering powers, as well as making it a criminal offence to commit "willfully or grossly reckless behaviour" in relation to a pension scheme.

Read more: MPs launch inquiry into government defined benefit pension proposals

Submitting its evidence for the White Paper to the Work and Pensions Committee, the ACA took issue with some of the committee's suggestions.

The ACA said that making "wilful and grossly reckless behaviour" in relation to a pension scheme a criminal offence would have little impact. The group argued that company directors were already liable to criminal sanctions, and that a specific offence in relation to pension schemes would not be a significant deterrent to unscrupulous directors.

It also said that substantial new powers for the Pensions Regulator were unnecessary as the body already had "substantial powers", and giving them more powers could risk fines being handed out disproportionately as the regulator tries to prove it is taking a tougher stance.

"We do not believe that substantial new powers are needed for the Pensions Regulator, as it already has significant powers, some of which it has used only sparingly," said David Everett, chair of the ACA's Pension Schemes Committee.

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