Pensions Regulator continues to expand online COVID-19 guidance
What you need to know
- The Pensions Regulator (TPR) is continuing to expand its COVID-19 guidance in response to feedback and questions received. All guidance that has been issued is on its dedicated COVID-19 web page and new items include guidance:
-on reporting duties and TPR’s enforcement activity; and
-for employers on automatic enrolment (AE) and pension contributions.
- The guidance on reporting duties provides more granular detail on how TPR will apply the principles of its regulatory easements to a range of reporting requirements.
- The new employer guidance covers AE obligations in the current environment. TPR states employer duties remain in force but employers can use existing three-month delays for assessing new staff or reenrolment.
- The new employer guidance also covers ongoing pension contributions and in particular provides some clarity on these in the context of the Government’s Coronavirus Job Retention Scheme. In brief, employers paying more than the statutory AE minimum must continue to pay this unless they seek to reduce DC contributions to no lower than the statutory minimum. Here, TPR will allow some regulatory easement to the duty to consult with employees where any benefit reduction is only in respect of furloughed staff, and only for the furlough period.
Actions you can take
- Read the additional guidance on TPR’s website www.thepensionsregulator.gov.uk/en/covid-19-coronavirus-what-you-need-to-consider.
- Identify which regulatory reporting easements impact your scheme and reflect in your approach.
- Reflect the guidance on pension contributions if looking to make use of the Coronavirus Job Retention Scheme but seek advice on remaining uncertainties and wider factors such as risk benefits.
TPR's COVID-19 guidance for trustees and employers issued as at 9 April 2020
The finer detail: Summary of reporting duties guidance issued 9 April
TPR has introduced easements that will be in place until 30 June 2020.
Regulatory reporting duties and enforcement activity
TPR will be in direct contact with schemes in relationship-managed supervision, refocusing on near-term risks.
TPR will take a case-by-case approach when deciding whether to take action for administrative and compliance breaches.
No need to report if breaches can be rectified within three months and this does not have a negative impact on savers. A record of decisions and actions must be maintained.
Specific reporting areas covered in guidance
Annual benefit statements
Easement applies but TPR may take action if breach not due to COVID-19
Legislation requires TPR to take action and impose fines – but penalty notices will not be issued before 30 June 2020.
Should report all cost increases above charge cap (unless not a material breach).
DB transfers values
Wider guidance already provided allowing suspension of DB transfers for three months. Greater attention must be given to heightened risk of scams.
Easements on requirement to carry out an effective 60-day consultation where linked directly to furloughed members and only for furlough period.
No easements apply. Must report all employer related investment breaches.
Easement applies to delay, as a result of COVID-19, in completing any review of the Statement of Investment Principles or default investment arrangement, but only where this does not extend beyond 30 June 2020.
Expect easement to apply to late filing of audited accounts as in most cases TPR does not expect this to be of significant detriment to members.
Late payment of contributions
TPR has extended the 90-day delay in employer contribution payments to 150 days after which late payment is considered of material significance and should be reported.
Regulatory easement does not apply.
Recovery plan not agreed
No action if delay is three months or less. Wider DB guidance on COVID-19 applies.
For further information, please get in touch with Wayne Segers or speak to your usual XPS contact.