The Department of Work and Pensions (DWP) has confirmed the “biggest shake-up of UK pensions for decades”.
The Pension Schemes Bill has received Royal Assent and is now an act. The DWP has said this will bolster protections for savers and further the government’s green agenda by supporting progress towards net zero.
The act will strengthen the powers of The Pensions Regulator by introducing the power to issue civil penalties of up to £1m, alongside three new criminal offences.
A new sentence has also been created for bosses who run pension schemes into the ground, or plunder pots to line their own pockets - a maximum penalty of seven years in prison.
The act legislates for the creation of a new style of pension scheme - Collective Defined Contributions (CDCs). Developed in cooperation with trade unions, the DWP said that CDCs have the potential to increase returns for millions, whilst being more sustainable for both workers and employers.
It will also ensure pensions play their part in our transition to a net zero future through climate risk reporting, and changes to requirements around pension scheme funding to improve financial sustainability.