Further government amendments to Pensions Bill have been proposed following concerns from industry consumers will be penalised if they cannot fulfil pension requirements.
The Department for Work and Pensions has made several changes to the 'moral hazard' clause, which potentially lets employers shift the burden of provision to the planned Pension Protection Fund for certain occupational schemes.
Amendments seek to ensure individuals, including shareholders and company directors, will not be held liable for any pension deficits.
Pensions Minister Malcolm Wicks says the moral hazard clause in the Pensions Bill makes clear to ‘unscrupulous’ employers “they can’t use company structures and business transactions as a cover for avoiding their pensions obligations and dumping their liabilities.”
“The amendments we have put forward to the Bill today will provide the reassurance responsible businesses have asked for on the aims, objectives and practical application of the moral hazard clauses," he says.
"At the same time the amendments ensure the Pension Protection Fund and the taxpayer don’t pay for employers seeking to dodge their pension obligations.”
Other changes include shortening to a maximum of six years before a shortfall occurs the length of time employers are liable for acts or transactions.
On matters of clearance, where companies want clarification on the effect of the legislation, the Regulator will provide a clearance procedure.IFAonline
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