In an interview with the Mail on Sunday, Theresa May promised to bring in tougher laws to protect pensions. Nicknamed the 'anti-Philip Green charter' by one party aide, the laws are considered to be in direct response to the BHS scandal in which Sir Philip Green allegedly sold high street chain BHS for just £1 and a severe pension deficit. A year later it went bust.
In response to the scandal, the Conservative Party has proposed to introduce greater powers to the Pensions Regulator. Any company pursuing a merger or acquisition valued over a certain amount or with over a certain number of members in the pension scheme would have to notify the Pensions Regulator, who could then apply certain conditions. In circumstances where is no viable plan in place and a disregard for the solvency of the scheme, the Regulator could then block those takeovers.
The Pensions Regulator would also have powers to block unsustainable dividend payments that threaten the solvency of a company pension scheme.
Enforcement powers would include issuing punitive fines for those found to have willfully left a scheme under-resourced and company directors responsible could be struck off for a period of time. A new offence could also be introduced to criminalise acts of a company board who intentionally or recklessly put at risk the ability of a pension scheme to meet its obligations.
This reform is likely to have a potentially significant impact on mergers and acquisitions which involve large occupational pension schemes – we will certainly report again on this proposal once further detail is provided in the Conservative’s election manifesto.
May has social care shake-up in her sights Tax breaks to help workers fund the care of relatives and a levy on the sale of homes worth more than £5m are among policies floated for the Tory manifesto