BusinessBusiness RecoveryPension changes to hit turnaround work

Pension changes to hit turnaround work

Turnaround professionals have slammed controversial measures that would force employers to fund pension schemes from their own pockets if they are deemed to have evaded their liabilities.

Link: Pensions mean little to employees, complain FDs

The Society of Turnaround Professionals (STP) said the changes introduced under the pensions bill would scare off company doctors who step in as directors.

It said that two parts of the bill – sections 35 and 39 – had been so loosely drafted that they created a climate of confusion and fear of ‘large, uncertain and unprecedented liabilities’ that could ensnare the innocent along with the guilty.

John Harris, chief executive of the STP, said: ‘It’s a bit like telling a heart surgeon to keep on doing his operations, but if he gets one wrong, the family could have a negligence claim on his personal assets.’

The Department for Work and Pensions insisted that the changes – known as the ‘moral hazard’ clauses – would stop companies or directors from trying to dump their liabilities on the government’s pension protection fund.

A spokesman insisted legitimate turnaround professionals had nothing to fear because cases would be decided at a senior level by the new pensions regulator.

But Harris said: ‘We don’t want this scrapped but clarified. To actually say “look chaps, just trust the regulator” is not good enough. Until you’ve got some case law you wouldn’t take the chance.’

The STP is just the latest addition to a growing alliance against the reforms, including the National Association of Pension Funds (NAPF) and the British Venture Capital Association (BVCA).

At least one venture capitalist is already understood to have pulled out of funding a company due to the changes, while a leading turnaround specialist said the same ‘chilling effect’ would affect company doctors.

  • Email Brian_Moher@vnu.co.uk.

Related Articles

Investment firm acquires Avon Steel Company Limited

Business Recovery Investment firm acquires Avon Steel Company Limited

1w Emma Smith, Managing Editor
Manchester law firm enters into administration

Business Recovery Manchester law firm enters into administration

1w Emma Smith, Managing Editor
KPMG appoints new global head of insolvency

Business Recovery KPMG appoints new global head of insolvency

4w Emma Smith, Managing Editor
EY hired by Carillion to review finances

Accounting Firms EY hired by Carillion to review finances

5m Alia Shoaib, Reporter
Using insolvency as a debt recovery tool

Business Recovery Using insolvency as a debt recovery tool

6m Emma Smith, Managing Editor
UK government should support mid-sized businesses to create a ‘new economy’ post-Brexit, says BDO report

Business Recovery UK government should support mid-sized businesses to create a ‘new economy’ post-Brexit, says BDO report

8m Alia Shoaib, Reporter
Over 800 jobs saved as Endless LLP acquires Jones Bootmaker

Business Recovery Over 800 jobs saved as Endless LLP acquires Jones Bootmaker

9m Emma Smith, Managing Editor
FRP Advisory expands operation with new office, partner appointments

Accounting Firms FRP Advisory expands operation with new office, partner appointments

10m Emma Smith, Managing Editor