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Pension's Regulator Statement on Covid-19

How might the current crisis affect employer contributions and industrial pension funds?

Possible Implications for Pension Funds

Some employers are opportunistically using the COVID 19 pandemic to lessen pension provision. They are arguing that the downturn in the stock market threatens the viability of their funds and will lead to Pension Regulator  (TPR)involvement.

These employers are wrong to act in such a way and all such efforts must be resisted. TPR has issued has already issued some advice to employers, it can be found here

Pensions Regulator Statement (pdf)

In summary the statement:

  • Reminds employers they continue to have Automatic Enrolment responsibilities
     
  • States it would "take a proportionate approach to any enforcement decisions in light of the current pressures"
  • Highlights the flexibilities available to employers during this time.
  • States that while minimum correct contributions must continue to be made on time, the period in which schemes must report payment failures has been extended from 90 days to 150 days to give trustees and providers more time to work with employers to bring payments up to date.
  • TPR has also written to providers asking them to be as flexible as possible when agreeing contribution payment dates.

Officers should also be clear that under existing rules, firms who employ 50 or more workers would have to consult for sixty days before decreasing contributions although there are some exemptions where the employer has furloughed staff. This easement doesn't apply to non-furloughed staff.

Employers must continue to consult for at least 60 days if they intend to reduce their contribution rates. If employers fail to do this, TPR will take regulatory action, including demanding backdated contributions at the higher level and issuing fines.

This regulatory easement ends on 30th June, but the regulator will keep this under review.

GEORGE GEORGIOU - NATIONAL PENSIONS ADVISER

Is the scheme open to public sector organisations, charities, and all industries?


The Government has said that ‘all UK organisations’ can be covered by the grant from HMRC. A more specific list of eligible organisations includes: 

  • Businesses 

  • Charities 

  • Recruitment Agencies (agency workers paid through PAYE) 

  • Public Authorities 

The Government has said that it expects public employees will only be furloughed in a small number of cases, although GMB expects employers to make the right decision for their employees’ circumstances regardless of sector. 

 
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