The Pensions Regulator’s response to COVID-19 - Quick reads - Gateley
Quick read

The Pensions Regulator’s response to COVID-19

Gateley Legal

Article by

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. 

Such measures could include:

  • Valuation timeframes being pushed back or lifted for the immediate future – this is a fast-moving situation and valuations could soon be out of date and obsolete with unnecessary costs having been incurred in the process;
  • An extension of timeframes for the submission of documents to tPR and how these are submitted including scheme returns and chair’s statements – it is likely that there will be reduced capacity amongst administration and actuarial teams as well as trustee boards and this should be allowed for so that the most urgent actions can be dealt with such as paying pensions and putting benefits into payment;
  •  A reduction or deferral of deficit reduction contributions and auto-enrolment contributions – there is currently no suggestion this will be adopted and with regards to auto-enrolment tPR has stated that it expects “employers to continue to meet their AE duties towards their staff”;
  • tPR’s Business Analyst team deployed to assist employers in sectors most affected by the pandemic by offering practical and pragmatic help; and
  • a hiatus on consultations and proposed tPR changes e.g. the new defined benefit funding code – trustees and employers will have enough to cope with just getting through the current situation and will not have the capacity to deal with or properly consider any additional alterations. 

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.
 

Need more information?

For further information on the steps trustees should be taking please see our webpage –Coronavirus: advice to pension scheme trustees and contact our pensions expert as listed below.

SubscribeHide

Forward thinking insight

Direct to your email inbox

Subscribe now