Pensions developments tracker

Coronavirus Job Retention Scheme

On 26 March 2020, the government published initial guidance on the Coronavirus Job Retention Scheme (JRS) whereby employers whose operations have been severely affected by Covid-19 can furlough employees and apply for a grant to cover a percentage of their usual monthly wage costs. The guidance notes for employers and for employees have been updated three times on 4, 9 and 15 April 2020. They include some information about how the JRS will fit with pension arrangements, but employers and trustees will also need to note the Pensions Regulator's guidance and take legal advice. There is also a Treasury Direction relating to the JRS dated 15 April 2020.

Clients might like to ask their usual Osborne Clarke contact for our employment team's FAQ guide on the JRS.

Coronavirus Act 2020

The Coronavirus Act 2020 received royal assent and became law in the UK on 25 March 2020. Our Insight contains a short summary of and a link to the Act.

No increase to General Levy

The General Levy on occupational and personal pension schemes was due to increase on 1 April 2020. However, in response to the Covid-19 outbreak, the government has laid regulations (The Occupational and Personal Pension Schemes (General Levy) (Revocation) Regulations 2020) which revoke the change and has confirmed that it will "focus on reviewing the structure of the levy and will be engaging with industry over the course of the next few months".

Changes to insolvency legislation

The government has announced wide-ranging emergency legislation in response to the Covid-19 crisis, in an attempt to reduce the burden on business and allow them to carry on trading during and after the pandemic. In our Insight, we look at planned changes in the areas of wrongful trading (from 1 March 2020), moratoriums, protection of supplies and restructuring.

Pension Schemes Bill delayed

On 4 March 2020, the Pension Schemes Bill was re-published including the amendments made at the House of Lords Committee stage. The next parliamentary stage (Report) has been delayed by the passage of Covid-19 emergency legislation and it is not clear when it will be scheduled.

Insights, webinars and briefings

Employers might like to look at our wide range of business insights and webinars on wider legal issues relating to the Covid-19 pandemic. These relate to areas such people and workforces, contracts (including force majeure and material adverse change events), corporate, real estate, dispute resolution (including impact on courts and tribunals), finance and funding, insolvency, competition and state aid, and regulation and compliance. You can also access our business guide and sign up for our regular Covid-19 legal briefing.

Employer clients might like to ask their usual Osborne Clarke contact for our FAQ guide for employers.

Trustee clients might like to ask their usual Osborne Clarke contact for our governance checklist for trustees and template business continuity plan.

Covid-19: General

On 20 March 2020, the Pensions Regulator (TPR) published an update for trustees, employers and administrators. For employers, the update confirms the pension scheme activities upon which TPR expects them to focus, the approach TPR will take to enforcement, and what employers should do if they cannot pay their contributions.

Covid-19: Automatic enrolment and pensions contributions

On 9 April 2020, TPR published guidance for employers in relation to automatic enrolment and the payment of pension contributions. The note also includes additional guidance in relation to the JRS, including on the approach TPR will take to the requirement to consult members before reducing employer contributions to a DC scheme.

Covid-19: DB scheme funding

On 27 March 2020, TPR issued guidance for DB scheme employers on a number of topics relating to scheme funding. Amongst other things, the note confirms the approach TPR will take to requests by employers to suspend deficit reduction contributions and what TPR expects of employers in terms of providing trustees with the information they need to assess the impact of the Covid-19 pandemic on the employer covenant and to consider any request by the employer to suspend deficit reduction contributions.

Covid-19: General

On 20 March 2020, TPR published an update for trustees, employers and administrators. For trustees, the update confirms TPR's expectations in a number of areas, including business continuity, administration and protecting members from scams. It also confirms what trustees should do if they believe they will be unable to pay members' benefits.

Covid-19: Scheme administration

On 2 April 2020, TPR published guidance for trustees and public service schemes confirming how it expects trustees to work with their administrators to ensure they deliver certain critical scheme processes, including paying benefits and processing retirements.

Covid-19: Reporting duties and enforcement activities

On 9 April 2020, TPR published an update on the approach it would like trustees and others to take to reporting breaches and the approach that it will take to enforcement. In addition to general comment, specific guidance is given in relation to annual benefit statements, DC chair's statements, DC charge controls, DB transfer values, employer consultation, employer-related investment, reviews of statements of investment principles, late accounts, late payment of contributions, master trusts, notifiable events and cases where a recovery plan cannot be agreed within the statutory deadline.

Covid-19: Trustees whose sponsoring employers are in corporate distress

On 20 March 2020, TPR published guidance for trustees of DB schemes whose sponsoring employers are in corporate distress due to the Covid-19 pandemic. This includes a series of questions which the trustees should ask the sponsoring employer and initial guidance on the approach TPR expects trustees to take if the employer asks to defer deficit reduction contributions.

Covid-19: DB scheme funding and investment

On 27 March 2020, TPR released guidance on funding and investment for the trustees of DB schemes. This includes detailed guidance for trustees who have received a request from the employer to suspend or reduce deficit reduction and/or future service contributions. It also gives guidance to trustees who are in the process of completing an actuarial valuation, confirms the action TPR expects trustees to take in relation to scheme investments and suggests action trustees might like to take in relation to transfer values (for example, suspending quotations and payments for a short period to allow the trustees to review transfer terms and/or assess the administrative impact of any increase in the number of requests for quotations).

Covid-19: DC investment

On 27 March 2020 TPR published guidance on investment for the trustees of DC schemes. The recommended steps include a communication to members on certain issues.

Covid-19: General

On 20 March 2020, TPR published an update for trustees, employers and administrators. For administrators, the update confirms TPR's expectations around scheme administration.

Covid-19: Late payment reporting

On 9 April 2020, TPR published an update confirming that the standard deadline for reporting late payment of contributions has been temporarily increased from 90 to 150 days to allow time to work with employers to bring payments up to date. Trustees and providers should note that the standard 90 day period (and so the extension to 150 days) will not apply in every case and take legal advice if they are not sure whether and, if so when, to report.

Consultation period extended

In response to the Covid-19 pandemic, the DWP has extended the deadline for responses to its consultation on non-statutory guidance for trustees on assessing, managing and reporting climate-related risks in line with the Taskforce on Climate-Related Financial Disclosures to 2 July 2020.

DB transfers: changes deferred

In response to the Covid-19 pandemic, the FCA has decided to delay the implementation of the new Transfer Specialist Qualification rules contained in policy statement 18/20 until 1 October 2021.

The FCA has also confirmed that it will delay its policy statement on pension transfer advice, including on contingent charging, to Spring 2020.

DC risk warnings and guidance for DB transfer advisers

The FCA has published guidance on how firms can and should support consumers that seek to access their pension savings during the Covid-19 pandemic and guidance for firms providing DB transfer advice at this time.
The guidance to firms includes a series of risk warnings which the trustees of DC schemes might like to consider with their advisers when thinking about what to say to members about the risks of accessing their DC benefits at this time.

GMP reconciliation data cuts deadline extended

Due to the need to reprioritise work in response to the Covid-19 pandemic, HMRC has extended the deadline for it to issue final data cuts for GMP reconciliation. It hopes to publish a final timeline by the end of April 2020.

Temporary changes to pensions processes

In pensions schemes newsletter 118, HMRC announced a series of temporary changes to pensions processes to help administrators in the light of Covid-19. The changes, which will apply for three months to begin with, include easements around rent and loan payment holidays, relief at source, accounting for tax returns and payments, and reporting transfers to a Qualifying Recognised Overseas Pension Scheme. Further guidance is promised.

Delay to calls for input on the Pensions Dashboard

The MaPS has published an update on progress by the Pensions Dashboard Programme team. Work on the dashboard is continuing, but the team has decided to delay launching two calls for input (on the scope of dashboards and on the data to be provided by schemes and providers) because of the Covid-19 pandemic. A detailed timetable is promised later this year.

'Top tips' checklists for trustees

The Pensions and Lifetime Savings Association (PLSA) has published "top tips" checklists for DB and DC schemes. The checklists set out key actions trustees can take around administration, communication, funding, governance and investment.

Osborne Clarke has prepared its own governance checklist for trustees and a template business continuity plan. Clients might like to ask their usual Osborne Clarke contact for these.

Stewardship update

The PLSA has urged trustees to "be watchful of how the companies in which they invest respond to the Covid-19 pandemic and be prepared to hold directors to account as decisions now may impact their long-term investment prospects", in particular to "keep an eye on how those firms in which they invest manage the pandemic and consider voting against directors who they believe did not behave appropriately towards their workforces this AGM season".

Guidance for administrators

The Pensions Administration Standards Association has released Covid-19 guidance for administrators, a practical blog and a webinar on cyber crime. The guidance for administrators includes guidance on the administrative processes which should be prioritised.

New information hub

The ICO has launched a new data protection and coronavirus information hub to help people to understand their data protection and freedom of information duties during the Covid-19 pandemic. The hub carries a statement about how the ICO will regulate at this time.