The Pensions Regulator (TPR) has recently published a statement on COVID-19 and what trustees of pension schemes need to consider.
Whilst it is appreciated that these are unprecedented times that are continuing to develop and few have experienced anything remotely similar in their lifetime, it is disappointing that tPR’s statement was somewhat light on practical help. Well-run schemes are no doubt already putting into place appropriate monitoring and contingency planning, making sure they are alive to employer covenant and cashflow issues whilst also endeavouring to ensure pensions still get paid and member queries are dealt with. Any existing issues that a scheme was facing may well be further exacerbated by current circumstances.
It is hoped that in the weeks to come tPR will provide practical assistance to schemes that have had the rug pulled out from underneath them. It is noted that tPR has stated it will be setting out its position as regards March and April valuations after Easter. What would be helpful is a range of measures that will ease the burden of those in the pensions industry who are just trying to get through one day at a time.
It is noted that the Pension Protection Fund (PPF) has also issued some guidance in respect of COVID-19 (https://ppf.co.uk/news/our-coronavirus-covid-19-preparation). Whilst the procedures for submitting contingent asset documentation have slightly changed – email documents will be permitted, and hard copies are no longer required – there is no suggestion that there will be a blanket extension to the deadline by which they need to be provided. This would have been helpful given the changing world we find ourselves in. Schemes that previously thought that such assets were not necessary or desirable may now have more justification for seeking them and employers may be more willing to provide them in light of constrained cashflow. Instead, a case-by-case extension may be permitted where the delay can be justified e.g. because key individuals are in quarantine. Where documents are provided late, the PPF will consider the circumstances for this and, where they deem it reasonable, will accept them. Reasons for the late submission should be provided when the documents are submitted.
At this point in time all of us need practical help as to how we can maintain a semblance of normality and carry on with the business of running pension schemes. It is hoped that further practical guidance will be issued by the relevant regulatory bodies and government in the weeks to come.