Alongside requiring firms to publish how “green” their pensions are, it gives the Pensions Regulator extra powers to issue massive civil penalties, alongside new criminal offences. Bosses who run pension schemes into the ground or plunder pots to line their pockets will face up to seven years in jail. The new Act will also change requirements around pension scheme funding to improve financial sustainability. Tom Selby, senior analyst at AJ Bell, said: “The Act places a new emphasis on schemes to consider the climate change impact of investments and to publish information on how this has been achieved.
“Over the longer term we expect savers to take a much keener interest in how retirement pots are invested.
“So there is every chance firms will need to go beyond these requirements.”
Pensions dashboards, where people can see all their retirement savings in one place, will be created.
The Pensions Minister Guy Opperman said: “This is a historic day for UK pensions, amidst all the challenges we’ve faced. This Act makes our pensions safer, better and greener, as we look to build back better from the pandemic.”
Comment by Guy Opperman
This week, after a year of debate, the Pension Schemes Bill became law.
It will make pensions safer, better and greener.
Trustees will be able to “red flag” a transfer request to stop hard-earned savings being moved to suspect schemes without expert guidance.
The Pensions Regulator will be able to act against bosses who run schemes into the ground or plunder pots.
They face of up to £1million fines and three new offences with seven-year jail terms. Alongside this, pensions dashboards will mean all pension pots can be viewed in one place. They will unite billions in lost, unclaimed pots.
Pension schemes will also be required to report their climate risk, and these changes to will significantly improve pensions’ financial sustainability.
This is why we are putting trustees’ duty to manage climate risk on a statutory footing. Britain truly is leading the way on the path to net zero.