TPR confirms updated criminal powers policy; consults on further powers

The Pensions Regulator (TPR) has published an update on how it plans to use new criminal powers to prosecute those who put savers’ pensions at risk, alongside a consultation on its approach to its other powers introduced by the Pension Schemes Act.

The Pension Schemes Act 2021 saw the introduction of two new criminal offences: the offence of avoidance of employer debt, and the offence of conduct risking accrued scheme benefits; both of which come into force from Friday 1 October.

Ahead of this, TPR has published updated policy on its approach to the powers, following a six-week consultation earlier this year, which received 49 industry responses.

In light of industry feedback, TPR has confirmed that the policy now includes a detailed case study illustrating how it expects to consider use of its new criminal powers, as well as identifying some common scenarios where it would not usually expect to consider use of these criminal powers.

In addition to this, TPR has "sharpened the language" in the finalised policy to clarify that the measures will only be used to target the most serious intentional and reckless instances of such behaviour.

TPR executive director of regulatory policy, David Fairs, commented: "These new powers will give us more options to punish wrong-doers, but we hope their existence will be a deterrent in themselves.

“We made clear in our consultation that we would not use these powers in a way that targets ordinary commercial activity but only for the most serious examples of intentional or reckless conduct. 

"We listened carefully to the feedback received and throughout the policy document, the examples and case study it now includes, we have strived to provide greater clarity to our regulated community. We remain a clear, quick and tough risk-based regulator ready to act to protect savers if necessary.”

However, the regulator also acknowledged that a number of responses to the consultation suggested that it would be helpful for TPR’s criminal powers to be put into context in relation to its Contribution Notice (CN) and financial penalty powers, and the interaction with its broader approach to enforcement.

Alongside these concerns, TPR said that it wants to ensure that people understand how it will approach situations where more than one of its powers could be engaged and there is choice about how it will proceed, as the Pension Schemes Act has introduced other new powers, including fines of up to £1m and expanded powers relating to the gathering of information.

In light of this, TPR has published a consultation on three draft policies outlining its approach to overlapping powers, monetary penalty powers, and information gathering powers, including the use of section 72 notices, and new interview and broader inspection powers.

TPR director of enforcement, Erica Carroll, stated: “As well as our criminal powers, the act gives us a package of other measures that allows us to better investigate areas of concern and deter and punish wrongdoing, all part of our role to protect savers.

"Our consultation on our criminal powers policy allowed us to listen to the industry and make changes. I therefore encourage industry to engage in our second consultation on our three further policies so we can have a rich and diverse set of views.”

The consultation will run for 12 weeks, with TPR expected to finalise the policies “early in the new year”.

Additionally, TPR has provided an update on the six-week consultation on changes to its Code of Practice 12 completed earlier this year, which looked at circumstances in which the new ‘act’ tests in relation to its CN power will be engaged, as well as updating the circumstances in which the existing ‘material detriment’ act test will be met.

TPR received 17 responses to this consultation, with the final version of the code and code-related guidance changed in response to some of the feedback received, including whether more practical guidance could be provided on how TPR will go about using the new tests.

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