Dealing with pensions in insolvency can be challenging for insolvency practitioners (“IPs”) and the Pension Scheme Bill (“Bill”) presents another.
Whilst a prudent insolvent practitioner should not be unduly alarmed, s114 of the Bill inserts a new section 80B into the Pensions Act 2004 which gives the Pensions Regulator (tPR) power to issue insolvency practitioners with a fine of up to £1 million.
A significant amount, and payable personally!
tPR will have power to issue a notice to an insolvency practitioner who knowingly or recklessly provides information to the pension trustees that is false or misleading, requiring that person to pay a penalty not exceeding £1 million.
On appointment IPs are required to give notice of their appointment under s22(2B) of the Pensions Act 1995 (“1995 Act”) and section 26 of the 1995 Act also requires an IP to provide pension trustees with any information reasonably required for the purpose of the scheme.
Whilst most IPs are going to give a proper response, a reckless response without first establishing the facts could put IPs at risk of a fine. Given the level of that fine IPs who intend to take an appointment over companies with occupational pension schemes should carefully note the provisions.
The Bill is currently progressing through parliament, having had its first reading on 15 October and the second reading scheduled for later this week.
We will write an update once the new provisions are in force but for current purposes IPs should note the risk and the potential for personal liability.