Pensions - Articles - Mismanaging company pension could mean seven years in jail


Commenting on the report of Amber Rudd’s interview with The Sunday Telegraph , Malcolm Mclean, Senior Consultant at Barnett Waddingham, said:

 “This represents a toughening up of the plans announced last year. Company bosses who mismanage their employee pension schemes could face up to seven years in prison instead of the maximum of two years initially proposed.

 "However the required legislation has yet to be made and could be some years away before it passes into law and becomes effective.

 "There are also serious doubts as to how easy it will be to establish the new criminal offence of “wilfully" or "recklessly“ mismanaging funds. These are ill-defined terms which a clever defence lawyer is more than likely to successfully challenge on the “beyond reasonable doubt” test needing to be satisfied in a criminal case.

 "It may well be that the government can expect to lose the first few prosecutions it takes in this area until such a time as precedents are established and a body of case law is built up.

 "It may be, of course, in the event that very few prosecutions will be undertaken and the government is relying on the very existence of the new legislation to act as a deterrent to any future employer who might otherwise be contemplating mismanaging their company pension scheme.”
  

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