Pencils are being sharpened and calculator batteries changed in restructuring advisers’ offices all over the UK. If there were dinner tables around which to offer such opinions, one of the topics to replace Brexit and the relative size of mortgage compared to others in the room would certainly be the Pensions Schemes Bill.
The Bill has passed through the Parliamentary process and is patiently awaiting Royal Assent in the corner of the chamber, but is already creating disquiet among soothsayers, who regard it like a worrying little seven year old with a twitch and an evil gleam in his eye, who looks likely to grow up to disrupt classes at senior school.
But why? Surely the provisions of the Bill have been designed to boost the Pensions Regulator’s powers after a series of high-profile corporate pension scandals dating back to 2016, including BHS, the failed retailer, and Carillion, the outsourcing group, left thousands of workers with poorer pensions than expected? When fully loaded and out of the blocks the Act will introduce two new criminal offences which could potentially apply to a wide range of ... ‘activity’. And therein lies the rub. It is the very type and scope of ‘activity’ that is causing unease, as no-one seems to know how widely the machine-gun rattle of bullets may spread from this new regulation weapon.
The businesses within the range of the Act are those with defined benefit and final salary pension schemes. It is precisely these type of organisations that are facing the greatest restructuring pressures as we edge our way into a new year realising, as a profession, that we will be required to give advice and take action to help pull them back from various precipices.
You see, this is the point, the new criminal offences to be introduced by the Pensions Schemes Act apply not just to company directors, but to lenders, investors, even landlords, suppliers ... and advisors. Us. You. Potentially. No-one seems to know just yet.
The shiny new criminal sanctions will not be introduced before the autumn of this year, and by then the Pensions Regulator should have issued guidance on just how alarmed we should, or should not, be by their initiation. Some commentators say we have nothing to fear in our field, as if we act lawfully and properly in the management and restructuring of businesses we are not within the sights of the new Act. Others, flicking through the detail of the Bill say:
”Really? Where do you get that interpretation from?”
The one source of advice we should be mining is that of the Pensions Regulator. What do they say?
“We recognise that the current economic climate poses challenges for employers and anyone concerned about the use of powers in restructuring situations can approach us about possible clearance applications”.
So, they have no idea either. Watch this space (and NTI’s CPD TAP) for more guidance when anyone has any idea what they and we should be thinking and saying.