Conservative Party manifesto 2017 – more powers for the Pensions Regulator?

The Conservative Party issued its general election manifesto yesterday, 18 May 2017. Tucked away under a section called “New Rules for a Changing Economy” are two short paragraphs dealing with the protection of private pensions.

As we reported in March, the Department for Work & Pensions (DWP) issued a Green Paper earlier this year seeking views on a range of proposed pension regulatory changes.

The Green Paper expressed measured views on many of the more controversial proposals put forward by the Commons Work & Pensions Committee, including a mandatory clearance regime and the introduction of punitive nuclear deterrent fines. In particular, the Green Paper acknowledged that increasing the powers of the Pensions Regulator is not something to be taken lightly.

The consultation on the Green Paper ended on 14 May 2017. The Conservative Party manifesto for the 2017 general election was issued on 18 May 2017.

Key pensions highlights

While the consultation on the Green Paper closed less than a week ago, the Conservative Party has confirmed that, if elected, it will seek to tighten pension regulation by introducing:

  • rights for pension schemes and the Pensions Regulator to scrutinise, clear with conditions, or (in extreme cases) block mergers, takeovers and large financial commitments; and
  • new powers to issue punitive fines for those found to have wilfully left a scheme under-resourced and to disqualify company directors.

A future government led by Theresa May has also committed to consider introducing new criminal sanctions for directors who deliberately or recklessly put pension schemes at risk.

The manifesto does not address other key proposals set out in the Green Paper, including the consolidation of pension funds and the introduction of easements for employers sponsoring stressed schemes, such as reducing inflation protection.

The Green Paper alluded to the impact that increased regulation could have on both legitimate corporate activity and the rescue culture. It also referred to the importance of ensuring that any sanctions are proportionate, workable and not detrimental to the functioning of the economy.

The DWP is currently analysing responses to the consultation on the Green Paper which closed on 14 May 2017.