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.
- As part of HM Treasury’s Winter Support Plan, Rishi Sunak unveiled the new “Job Support Scheme” (JSS) on 24 September, designed to protect viable jobs in businesses that are facing lower demand over the winter months due to COVID-19. The scheme will open on 1 November 2020 and is intended to run for six months. Under the new scheme, employees must continue to work at least 33% of their usual hours – the employer will continue to pay the employee for time worked. For every hour of the employee’s usual hours not worked by the employee, the government and employer will each pay one third of the employee’s usual pay. The government contribution will, however, be capped at £697.92 a month. This is intended to ensure employees earn a minimum of 77% of their normal wages, where the government contribution has not been capped. A JSS factsheet published by HM Treasury has confirmed that the grant will not cover Class 1 employer national insurance contributions or pension contributions and these contributions will remain payable by the employer. The publication prepared by our Labour & Employment colleagues contains more information.
- The Pension Protection Fund (PPF) has launched a consultation on its proposals for calculating the PPF levy for 2021/22. The PPF says that its strong funding position means that there is no need to raise the levy at this time. It is proposing a levy estimate of £520 million, which is £100 million less than the levy estimate for 2020/21. The PPF is proposing two new measures, in particular, to help schemes. First, schemes with less than £20 million in liabilities would see their levy cut in half. Second, the cap on the amount of levy paid by any individual scheme would be cut from 0.5% of that scheme’s liabilities to 0.25%.
- The pension schemes bill is progressing through Parliament. It is due its second reading in the House of Commons on 7 October 2020.
- The Corporate Insolvency and Governance Act 2020 (Coronavirus) (Extension of the Relevant Period) Regulations 2020 came into force on 29 September 2020 and extends the duration of some of the temporary measures introduced by the Corporate Insolvency and Governance Act 2020 (CIGA). Of particular note for pension trustees are the extensions to the restrictions on statutory demands and winding up petitions to 31 December 2020 and the temporary moratorium provisions to 30 March 2021. For more information on how CIGA impacts pension schemes, please see our blogs.
- The government has launched a working group, which will make recommendations later this autumn on ways to tackle the growth of small, deferred pension pots in defined contribution schemes. The Pensions Policy Institute has issued a report to support the work of the group.
- Regulations have been published amending the Investigatory Powers Act 2016. This Act gives power to public authorities to obtain information relating to communications data for the purpose of preventing or detecting serious crime. The regulations extend that power to The Pensions Regulator.
- Indexation of guaranteed minimum pensions (GMPs) is back in the news. Last year, the Parliamentary and Health Service Ombudsman found that the Department for Work and Pensions (DWP) had not adequately communicated the impact that switching to the single-tier state pension might have on certain individuals who had contracted out of the state second pension. The DWP has now written to the Work and Pensions Committee confirming that it proposes publishing a factsheet on GOV.UK. Once available, trustees might want to direct pension schemes members to the factsheet for further information on the issue. In some cases, affected individuals may be able to claim compensation.
- See our blog on the replacement of the London Interbank Offered Rate (LIBOR) with the Sterling Overnight Index Average (SONIA), and the recommended actions for pensions trustees.
If you would like specific advice on any of these issues, or on anything else, please contact a member of our Pensions team.
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