Back in 2024, I asked the question whether £1 million was enough. Enough for what, exactly? A comfortable retirement? To replace a big lottery win?
Pat on the back if you remember that the question related to new(ish) powers of The Pensions Regulator (TPR) to issue a financial penalty of up to £1 million, and whether that was sufficient to act as a deterrent for those tempted to take actions that might adversely impact their pension scheme.
Actions that are capable of attracting this higher £1 million financial penalty include:
- providing false or misleading information to TPR or pension scheme trustees
- failure to comply with a contribution notice
- failure to comply with the notifiable events regime, and
- committing the offences of “avoidance of employer debt” or “conduct risking accrued scheme benefits”.
When the government first announced in 2018 that it would strengthen TPR’s powers, the Work and Pensions Committee, which had run inquiries into the collapse of both BHS and Carillion and the subsequent pension scheme deficits, were particularly scathing of the potential £1 million penalty.
So far as Frank Field was concerned, £1 million just wasn’t enough. He said, “The accountancy profession must have been in charge of drafting this section of the paper, as it appears they have misplaced a decimal point. The likes of Sir Philip Green need to be fined a billion, not a million, if the Regulator is to have a deterrent effect.”
As well as the power to issue a financial penalty of up to £1 million, other measures introduced by the Pension Schemes Act 2021 (PSA21) to assist TPR to tackle events that could have an adverse impact on scheme funding, were:
- The addition of two new contribution notice tests (the “employer insolvency” test and the “employer resources” test), to sit alongside the material detriment test. These new tests were designed to make it easier for TPR to take action. They allow TPR to look at a snapshot in time and the impact on the employer, rather than TPR being required to predict the likely impact of an event on the future funding levels of a DB scheme.
- The creation of two new offences of “avoidance of employer debt” and “conduct risking accrued scheme benefits”.
By way of recap, the offence of avoidance of employer debt includes any act or failure to act intended to prevent the recovery of the whole or any part of a section 75 debt. This includes preventing such a debt from becoming due, compromising the amount of the debt or reducing the amount of a debt that would otherwise become due.
The offence of conduct risking accrued scheme benefits includes any act or failure to act that detrimentally affects in a material way the likelihood of accrued scheme benefits being received. This applies where the person knew or ought to have known that such a course of action would be likely to have that effect.
The key points to note about these two offences are that:
- Almost anybody can be caught by these offences. There is no requirement to be “connected” or “associated” with a scheme employer in the same way that there is for contribution notices.
- In relation to the offence of conduct risking accrued scheme benefits, it is not necessary for there to have been any intention to risk accrued scheme benefits, the person just had to know, or ought to have known, that the action they took would have had the prohibited result.
- Both offences carry the risk of a criminal penalty of an unlimited fine and/or imprisonment of up to seven years. Alternatively, TPR could use its financial penalties powers and levy a penalty of up to £1 million.
In response to a freedom of information request in July 2024, TPR confirmed that it had not yet used the new contribution notice tests, nor had it prosecuted the new criminal offences of avoidance of employer debt or conduct risking accrued scheme benefits, nor had it applied the new financial penalties of up to £1 million under section 88A of the Pensions Act 2004 (inserted by PSA 21).
Fast forward another two years: have these powers ever actually been used? A quick google search didn’t reveal anything, and AI directed me to my previous blog on the topic, so I asked TPR.
TPR confirmed that, as of 22 September 2026, these new(ish) powers have not yet been used.
However, in its 2024 response, TPR did say, “Even though we have not had occasion to use the powers listed at 1 and 2 above [relating to new contribution notice tests and criminal offences], which would only apply to acts occurring after October 2021, we have seen evidence that the powers’ existence influences behaviour in the market in the ways intended.
In respect of the new section 88A powers, to date we consider that the threat of these powers is providing the necessary deterrent to ensure compliance with our information gathering requests.”
The fact that TPR has never had to use these powers, or impose a financial penalty under section 88A, seems to evidence that the PSA21 powers, or the threat of them at least, do act as a suitable deterrent.
So it seems that £1 million is indeed enough. For now, at least….!
