We welcome the new guidance from the Pensions Regulator on flexibility regarding DC pensions contributions. The area is developing on a daily basis and the ability of TPR to set out ongoing and updated guidance is key for employers and scheme members.
We would also welcome views on whether there are additional easements that the industry requires. We would then seek to feed those back to TPR via our membership of PLSA and other consultative committees.
One issue that we have in mind is the easement below in relation to consultation requirements for decreases in employer contributions to DC schemes. The Pensions Regulator has confirmed that it will not take action where the consultation requirements are not met, provided each of the conditions below are satisfied.
One question is whether employers need greater flexibility? This includes on the requirement that the easement only applies to furloughed staff. Many employers will have a mix of furloughed and non furloughed staff and may want to apply the reductions to all staff at the same time. Reasons for this could include much needed costs savings; to cut complexity from admin; and greater equality of treatment.
Such reductions may be consistent with protecting and building member pension pots, especially where the reductions help promote the ongoing financial well being of the employer.
Your comments would be welcomed on this and generally in relation to the guidance, either via Linked in or to our Burges Salmon Pensions COVID-19 Helpline for employers and trustees - contact details Robyn.firstname.lastname@example.org, tel 07812001810 #pensions #iod #pensionslaw
TPR comments, if all of the following apply, it will not take regulatory action in respect of a failure to consult for the full 60 days: ~You have furloughed staff for whom you are making a claim under the Coronavirus Job Retention Scheme. ~ You are proposing to reduce the employer contribution to your DC scheme in respect of furloughed staff only. For staff who have not been furloughed the existing pension contribution rate will continue to apply. ~The reduced contribution rate for furloughed staff will only apply during the furlough period, after which time it will revert to the current rate. ~ You have written to your affected staff and their representatives to describe the intended change and the effects on the scheme and on your furloughed staff.