Here is our brief weekly summary of key legal and regulatory developments relevant to occupational pension schemes, which you might have missed, with links for further information.
HMRC has updated its Coronavirus Job Retention Scheme (CJRS) guidance to provide further detail regarding the phasing out of the CJRS by the end of October. The amount that employers can claim from the CJRS will be reduced over the coming months and furloughed employees will be able to return to work part time from 1 July (a process called ‘flexible furloughing’). For an overview of the reductions to the amount of grant that can be claimed from the CJRS please refer to the policy paper published by HMRC on 12 June.
The Pensions Regulator (TPR) has updated its Automatic Enrolment and DC Pension Contributions COVID-19Guidance for Employers to cover the introduction of flexible furloughing and the phasing out of the CJRS, in particular the ceasing of grants to subsidise pension contributions for claims starting on or after 1 August. Note also that the updated guidance confirms that the regulatory easement, under which TPR will not take regulatory action if employers reduce employer pension contributions for furloughed employees but do not consult employees for the full 60 day period required under pensions law (provided the employer meets specified conditions), will now be maintained until 30 September 2020. TPR is to keep this extended cut-off date under review.
On Tuesday 16 June, TPR updated some more of its COVID-19 guidance and restated its position as a “pragmatic” regulator during the current pandemic. In particular:
Reporting duties that were paused in April will resume from 1 July, with the exception of late payments of contributions to defined contribution schemes (which TPR will review by the end of September).
There is updated guidance for trustees of defined benefit schemes where the sponsoring employer requests a suspension or reduction of deficit repair contributions. Trustees should continue to be open to requests from employers, subject to undertaking appropriate due diligence and recognising that there may now be greater insight into an employer's short-term liquidity than when the pandemic began.
TPR continues to take a pragmatic approach to annual benefits statements, accepting that administrators may need extra time to prepare these. It does not plan to take enforcement action for late scheme accounts that are signed off by 30 September 2020 (although trustees need to report late accounts).
In the coming weeks, TPR is expected to make an announcement about the regulatory regime for defined benefit consolidator vehicles. The new regime may provide further options for transferring benefits to commercial consolidator schemes as an alternative to buying out benefits with an insurer.
As mentioned in a previous update, the Corporate Insolvency and Governance Bill is currently making its way through Parliament. If it is enacted without further amendment it will signal a seismic shift in the interaction between insolvency and pensions law. We have considered two elements of the proposed changes in our blogs on the new moratorium provisions and the new restructuring plan provisions.
The Pension Schemes Bill is back on the agenda, with the House of Lords due to undertake a further line by line examination of the Bill on 30 June 2020. By way of reminder, the Bill legislates for "collective money purchase benefits" and the pensions dashboard. It amends the scheme funding provisions of the Pensions Act 2004 and it introduces changes to the individual transfer regime (in response to the ever present threat of pension scams). It strengthens the powers of the Pensions Regulator and also makes some amendments to the rules around the Pension Protection Fund. For a more detailed overview of what the Bill does, see our blog.
The Department for Work and Pensions and a number of pension schemes have been using an incorrect link which directs individuals to a firm of financial advisers instead of the government’s free Pension Tracing Service. Trustees and administrators should check that they are providing a link to the correct website.
If you would like specific advice on any of these issues, or on anything else, please contact a member of our Pensions team.