Will criminal sanctions for pensions scheme underfunding ever be used in anger?

Commenting on the Government's response to the consultation on protecting Defined Benefit pension schemes, Ian Bell, head of pensions at RSM said:

'The announcement of new criminal sanctions for wilful or reckless behaviour in relation to pension scheme funding may have generated headlines but you have to wonder whether these powers will ever be capable of being used in anger.

'The burden of proof needed to prove wilful or reckless behaviour will likely be too high a bar for this to be an effective deterrent, particularly in circumstances in which trustees have managed to secure the level of funding set out under a covenant assessment.

'Arguably, trustees will be able to use the threat of criminal sanctions to give them additional leverage when seeking to secure appropriate scheme funding. However, if that is where negotiations get to between the pension scheme and the sponsoring employer, you know you have a problem.'