TPR singled out situations where scheme members could be targeted to access their pension assets through trust-busting or pension liberation activities as potential risk areas. A statement from TPR said those who attempt to engage in such behaviour are at risk of both civil and criminal investigation and added that where criminal behaviour occurs the regulator will take action in concert with the relevant authorities to secure assets for members and to sanction against wrong-doing.
It also said it would be on the lookout for behaviours which unacceptably increase risks to members’ benefits, the PPF and other levy-paying schemes.
These include avoidance of employer debt and inappropriate transfers for individuals from under-funded schemes that would not subsequently have the resources or adequate employer support, as well as employer-related self-investment and poor practice associated with transfer incentive exercises.
Powers to sanction such behaviour include penalties for breaches of legislation, powers to remove and appoint trustees, powers to reverse transactions carried out under value, powers to freeze and wind-up schemes, and anti-avoidance powers which can require associated employers to support a scheme or require the payment of the full section 75 debt.
Tony Hobman, chief executive of TPR, says: “In these tougher times, we will continue to monitor the economic situation and, along with our partners, to continue to focus on the key risks in the system to ensure that the promises made in pensions are upheld.
“We remain assured that the regulatory framework is flexible enough to cope with the impact of the economic downturn, and will continue to remain vigilant through the downturn and encourage others to do the same, and to contact us if they have concerns.
“In doing, we hope to ensure uniform adherence to the high standards shown by the vast majority to secure a level playing field and the long-term protection of UK pensions.”
Peter Murphy, partner at Sacker & Partners says: “Unusually, the Regulator specifically referred to the possibility of dishonesty and fraud affecting pension schemes. Although noting the risk as being ‘very rare”, it also says it is ‘nonetheless real’. Indeed, last year it was publicly reported that the Serious Fraud Office was investigating an independent trustee following a referral by the Regulator.”