On 11th February 2021, the Pension Schemes Bill received Royal Assent, thus becoming the Pension Schemes Act 2021.
The Act covers a variety of modifications strengthening and expanding the powers of The Pensions Regulator (TPR) and in this form enhancing protections for pension saver. With the new Act, new sentences and penalties will be brought along, spanning up to a 7 years custodial sentence or a new civil penalty of up to £1m. Here’s a brief view of the criminal offences and penalties which will come into effect with the Act.
These new regulations are intended to dissuade employers from making reckless decisions with their defined benefit (DB) schemes and strengthening the Regulator’s powers to take rapid action to protect members’ savings.
Also, the pensions dashboard framework is contained in the act, which will allow savers to have a consolidated view of their State and private pension information. This will make it easier for them to access and review their pension pots, calculate their monthly retirement income and learn how to improve their retirement plans.
The creation of a new collective defined contribution (CDC) scheme is mentioned, which will allow a collective fund to be shared between all scheme members, rather than each member saving into their own individual pot, with the aim of increasing returns for the scheme members whilst remaining sustainable for employers.