Fraud Insights: Criminal sanctions for wilful and reckless mismanagement of pension schemes

In February 2019, the Government published its response to the consultation on Protecting Defined Benefit Pension Schemes – A Stronger Pensions Regulator (the “Consultation Paper”). Amongst the new proposed regulations in the Consultation Paper, the government said it intends to create a new criminal offence of wilful or reckless behaviour in relation to a pension scheme punishable by a maximum penalty of up to seven years’ imprisonment and/or unlimited fines.

Hannah Blom-Cooper, a Legal Director in the Fraud Defence Group, says:

“The consultation indicates that the new offence is intended to prevent and penalise mismanagement of pension schemes. In particular, the new criminal offence is directed at individuals who wilfully or recklessly mishandle pension schemes, who endanger workers’ pensions through mismanagement, who allow unsustainable deficits to build up or who take huge investments risks. Whilst a new criminal offence is envisaged, the scope of what will be considered “wilful and reckless behaviour” is not yet clear. Until further guidance is provided, it is going to be difficult, if not impossible, for directors and trustees of pension schemes to understand the possible impact of the proposed new legislation.”

Milena Lavinia Armene, a Paralegal in the Fraud Defence Group, says:

“The government’s response emphasised that it is intended that the new custodial sentences will be consistent with the existing penalties targeting fraud and insolvency offences. The new proposed offence will hopefully prevent pension savers suffering losses when businesses fail due to reckless behaviour of management. As more workers are being brought into workplace pensions saving by automatic enrolment, and as minimum contributions increase, it will become even more important for these types of protections to be in place and prevent workers losing their pension savings.”

Keep reading

...
C5 – 18th Edition Fraud, Asset Tracing & Recovery – Geneva – March 14-15, 2024
We are excited to announce that we are a media partner for American Conference Institute’s Fraud, Asset Tracing & Recovery Geneva conference that is taking place on March 14-15, 2024, in Geneva! Deemed as the foremost, can’t-miss event each year, the 2023 agenda will be fully revamped, and you don’t want to miss out on
Read
...
IFG Conference in Hong Kong on 25th April 2024!
We are very excited to announce that we shall be hosting the International Fraud Group’s bi-annual conference in Hong Kong this spring, organised by Karas So LLP in association with Mishcon de Reya on Thursday 25th April 2024. This is a great opportunity for you to engage with international lawyers, forensic accountants, restructuring and insolvency experts,
Read
...
OffshoreAlert is going to Bangkok!
We are delighted to be supporting event partner for Offshore’s first Asia-Pacific Conference. OffshoreAlert Bangkok! February 28 – 29, 2024 at the Siam Kempinski Hotel Bangkok 991/9 Rama I Rd, Pathum Wan, Bangkok, Thailand OffshoreAlert Bangkok is our first conference in the Asia-Pacific region and is designed to be a destination event to which attendees
Read
...
Stop the Traffik “Big Give”
The IFG recently match funded our sponsor STOP THE TRAFFIK Group Big Give Christmas Challenge assisting Stop the Traffik in raising critical funds which will bolster their fight to create a world where no person is bought or sold. This would not have been possible without our incredible support. Watch this space for further updates
Read