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.
The Pension Protection Fund (PPF) has announced that schemes or employers who struggle due to COVID-19 to pay the PPF levy within 28 days of receiving their invoice this autumn will be able to apply for an extension allowing for payment within 90 days. If the PPF accepts the application and the levy is paid in full within the 90 days no interest will be charged. As in other years, it will also be possible to request a payment plan.
In our final blog on the Corporate Insolvency and Governance Act, we noted that the final shape of the Act includes provisions enabling the introduction of regulations granting wider powers to The Pensions Regulator (TPR) and the PPF. Regulations have now been made in relation to the PPF's powers.
Where a moratorium is in force in relation to an employer of a pension scheme, which has been a PPF eligible scheme at any time during the moratorium, and the trustees are a creditor of the employer, the PPF will take over exercising certain of the trustees' rights. These rights relate to instances when an extension to a moratorium period is proposed and/or when the trustees/PPF wish to challenge the directors' actions. Before exercising these rights, the PPF must consult with the trustees.
Where a restructuring plan is proposed in relation to an employer of a PPF eligible pension scheme, and the trustees are a creditor of the employer, the PPF will have the same rights as the trustees. However, where a creditors' meeting is summoned for the purpose of voting on a compromise or arrangement, the PPF will exercise all of the pension scheme voting rights to the exclusion of the trustees. The PPF must first consult the trustees.
On 8 July, The Pensions Ombudsman gave evidence to the Work and Pensions Committee, in which he said that he expects to see an increase in COVID-19 related complaints, such as pension scams, non-payment of employer contributions and ill health applications - although some of those complaints might take 12 months to filter through. Trustees can take some steps now to protect against such complaints by revisiting TPR's guidance on communicating with members during the pandemic, which urges trustees to keep pension scheme members fully informed of delays to processes and changes to services during the pandemic.
Also on 8 July, the Chancellor delivered his Summer Economic Update. The pensions industry no doubt breathed a collective sigh of relief, as the Update did not contain anything noteworthy in the way of pensions measures. It is anticipated that the Chancellor might look to make some pensions tax changes as part of the autumn Budget and Spending Review.
#PensionsTensions; Watch this space for our new series of briefings (and #PressureMeasure ratings) exploring the stresses & strains on UK pension saving following the COVID-19 pandemic. Starting next Tuesday, each week we will examine a different perspective - the Member Experience, the Trustee Experience, the Employer Experience and the Investment Experience – of the long-term impact of the COVID-19 pandemic. #How2DoPensions.
If you would like specific advice on any of these issues, or on anything else, please contact a member of our Pensions team.
Access our global COVID-19 Coronavirus Resource Hub for guidance on key legal and risk issues for businesses.
