Reckless employers who put pensions at risk may face unlimited fines or prison

PA

Reckless company directors and employers who put company pension schemes at risk could face unlimited fines or a prison sentence under Government proposals.

Minister for Pensions and Financial Inclusion Guy Opperman is launching a consultation amid plans to ramp up the punishments for wilful or reckless behaviour that jeopardises a pension scheme.

The consultation is part of moves to beef up the powers of The Pensions Regulator (TPR), enabling it to step in more quickly and more often when companies make changes which could damage the pension scheme.

The Government is aiming to bolster protections for defined benefit (DB) pensions, such as final salary pensions, which promise pension savers a certain level of income when they retire.

It said the existing system is working well for the majority of DB pension schemes, members, trustees and sponsoring employers - and the vast majority of schemes and businesses are continuing to help in providing a secure retirement for millions of people.

But there are ways in which the system could be strengthened, it said.

Ahead of the launch of the consultation, Mr Opperman said: "The Government's position on defined benefit pensions is clear: Where an employer can, they must continue to meet their responsibilities.

"Millions of people across the country rely on defined benefit pension schemes to support them during their retirement.

"That's why we are committed to introducing a range of new measures which support the Pensions Regulator to be clearer, quicker and tougher.

"This is an opportunity to strengthen defined benefit pensions' protection for the long term, and it is extremely important we get the changes right."

The consultation will run until August 21.