The Pension Regulator stakeholder update June 2020
19 June 2020
The Pension Regulator (TPR) has updated its guidance to include;
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Update guidance on how to calculate the workplace pension contributions following the changes to the Coronavirus Job Retention Scheme.
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The announcement of an interim regime for emerging superfund pension market.
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The extended measures to help pension schemes tackle COVID-19 challenges.
Guidance for employers calculating workplace pension and National Insurance contributions
Employer guidance has been update in line with phased changes to the government’s Coronavirus Job Retention Scheme. The guidance includes information on how to treat furloughed workers who are returning to work part-time and what to do if an employer is struggling to pay contributions. From August, employers will need to fund pension contributions and National Insurance contributions for staff.
Superfunds – new interim regime for emerging market
New guidance has been issued to set out the expectations how defined benefit (DB) consolidator superfunds and other new models must show they are well-governed, run by fit and proper people and that they are backed by adequate capital. The guidance also explains how the scheme will be assessed and regulated.
In brief a superfund is a model that allows for the severance of an employer’s liability towards a DB scheme and one of the following conditions applies:
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the scheme employer is replaced by a special purpose vehicle (SPV) employer. This is, to all intents and purposes, a shell employer and is usually put in place to preserve the scheme’s PPF eligibility
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the liability of the employer to fund the scheme’s liabilities is replaced by an employer backed with a capital injection to a capital buffer (generally created by investor capital and contributions from the original employers)
Full details can be read in the guidance.
The regulatory regime has been announced by TPR to ensure that clear rules are in place as these models emerge. It ensures that savers and the pension protection fund (PPF) are protected while providing employers and trustees with more choice during this current period of uncertainty.Reporting and enforcement – extending measures to help pension schemes tackle COVID-19 challenges
Guidance has been created to help pension scheme trustees and employers manage the financial impact of COVID-19. Among the updates is further guidance for trustees of DB schemes facing employer requests to agree to suspend or reduce deficit repair contributions (DRCs). The guidance now invites trustees to resume reporting certain key information to TPR to ensure that risks are being managed and savers protected. It also includes updates on the following reporting duties:
Late payments: TPR will continue to give DC and AE providers 150 days to report late payments of contributions. This will be evaluated at the end of September 2020.
Pension transfers: Trustees should continue to issue a letter template to all members requesting a CETV quote and monitor requests for concerning patterns.
Annual benefit statements: TPR is continuing to take a practical approach to annual benefits statements accepting that the impact of COVID-19 means schemes need additional time to issue these to members.
Accounts: Trustees will be asked to report any failure to prepare audited accounts but TPR will not be looking to take enforcement action on late accounts signed off by 30 September 2020.
Chair’s statements: The legislation around chair’s statements does not allow discretion in relation to enforcement. TPR does not expect to be reviewing statements before the autumn.
Master Trusts: From 30 June 2020, Master Trusts should return to issuing a formal report to notify TPR of all triggering and significant events.
A copy of a newsletter sent to trustees today can be found here.
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