Tatton MP Esther McVey, secretary of state for work and pensions, has ushered in tougher measures to deal with companies who put workers’ pension payouts under threat.
Outlining her recommendations, she said new rules will give employees piece of mind their financial future is secure.
The Tatton MP added that the vast majority of companies fulfil their duty to their staff, but new rules will be coming into place to tackle those who neglect their pension responsibilities.
In her role as work and pensions secretary, Ms McVey set out measures to give The Pensions Regulator more powers to get the information they need quickly.
She also introduced tougher penalties – including hefty fines and criminal convictions for those who “wilfully or recklessly” put the financial future of employees at risk.
Ms McVey commented: “Our goal is to make sure people have confidence in these schemes by increasing the protections in place and by stopping the irresponsible few.
“We will not stand for employers evading their responsibilities and relying on the protection that the system offers whilst others who do play by the rules, have to foot the bill.”
The white paper ‘Protecting Defined Benefit Pension Schemes’ comes in the wake of the BHS and Carillion collapses and follows a wide-ranging consultation with workers, employers and the pensions industry.
Other initiatives being considered will support consolidation of defined benefit schemes, (where the amount paid is based on how many years an employee has worked for their employer and the salary they’ve earned) to make them more efficient and improve governance.
There are more than 10.5 million defined benefit pension scheme members in the UK and most employers are doing the right thing and people will get their pension in full.
Employers behaving correctly will not see major changes but all will be given clear instructions of what is expected from them.