Bosses who gamble with their staff’s pension schemes will face prison sentences of up to two years under plans to criminalise their unscrupulous business practices.
Theresa May said the tough new measures would safeguard staff from “irresponsible” executives who risk their workers’ future financial security without fear of the consequences.
It comes nearly two year after the public outcry over the collapse of BHS, which resulted in the loss of 11,000 jobs and the security of more than 19,000 pensions cast into doubt.
The high street chain’s failure came after business tycoon Sir Philip Green decided to sell the company to Dominic Chappell in March 2015, just days before the Pension Regulator demanded hundreds of documents relating to its £571m pension deficit.
Mr Chappell, a thrice bankrupt former racing driver who acquired the company for just £1, has since been convicted for failing to provide pension information to the regulator and ordered to pay £10m to help offset the hole in BHS’s pension fund.
Meanwhile, Sir Philip, who faced calls to be stripped of his knighthood, later agreed to pay the £363m required to rescue the pension scheme, having earlier received £307m in dividends from the company between 2002 and 2004.
Announcing the proposals, Mrs May said it was “absolutely vital” that people who worked hard and contributed to society throughout their career should have “confidence” that their pension would be secure in retirement.
“I am committed to making sure our economy works for everyone – backing businesses to create good jobs but stepping in to make sure they play by the rules,” she continued.
“That’s why my Government is making sure the Pensions Regulator has the powers it needs to crack down on the minority of businesses who shirk their responsibilities.
“The action we are taking will ensure that the majority of responsible employees, employers and pension schemes will no longer have to bail out the irresponsible few.”
Dodging or abusing pension responsibilities will be made a crime under the plans and the regulator will be given powers to intervene earlier when problems are suspected.
The Insolvency Service will also be given extra powers to help protect employees and small suppliers from reckless company directors.
Echoing Mrs May’s comments, the Work and Pensions Secretary Esther McVey said: "Up and down the country the vast majority of employers are doing the right thing and acting in the best interests of their staff.
"But we have seen what can go wrong, therefore we will clamp down on and - where appropriate - punish directors who wilfully or recklessly put pension schemes at risk.
"It is right that those responsible face tougher sanctions and we need to make sure that the Pensions Regulator has the powers in place to act swiftly when action is needed."