Covid-19: Pensions Update 28 May 2020

Schemes

On 22 May 2020, the Chancellor of the Exchequer Rishi Sunak made a further Treasury Direction in relation to the Coronavirus Job Retention Scheme. The new Direction reflects the extension of the scheme and clarifies some of the provisions in the Treasury Direction released earlier this year.

HMRC has launched a collection page carrying links to the different Coronavirus Job Retention Scheme (CJRS) guidance documents.

HMRC has also published some examples of how to work out 80% of wages, National Insurance contributions and pension contributions, and published and updated a new guidance note called ‘Check which employees you can put on furlough to use the Coronavirus Job Retention Scheme’.

The following guidance notes have been updated: ‘How to make a claim’; ‘Work out 80% of your employees’ wages’; and the guidance notes for employees and employers. To see the details of the updates, click on the ‘see all updates’ link at the top of each page.

Employers and trustees might also be interested to read our Insight ‘Staffing companies and Covid-19: latest furlough scheme and lockdown exit developments’, and our Insight on the possibility of the government imposing restrictions on the activities of companies which have accessed government support mechanisms such as the CJRS.

Legislation

On 7 May 2020, the Department of Health and Social Care published the Coronavirus Act 2020 status table. The table sets out which provisions of the Coronavirus Act 2020 are in force, have been suspended or revived.

On 20 May 2020, the government introduced the Corporate Insolvency and Governance Bill 2019-21 to Parliament. The explanatory notes accompanying the Bill confirm that it contains three main sets of measures: ones introducing “greater flexibility into the insolvency regime, allowing companies breathing space to explore options for rescue whilst supplies are protected, so they can have the maximum chance of survival” at this time; ones temporarily suspending “parts of insolvency law to support directors to continue trading through the [Covid-19] emergency without the threat of personal liability and to protect companies from aggressive creditor action”; and ones providing companies and other bodies with “temporary easements on company filing requirements and requirements relating to meetings including annual general meetings (AGMs)”.

This news story and our Insight give an overview of the insolvency and corporate governance measures contained in the Bill. You might also be interested in this news story from Companies House and our Insight on the changes that will make it easier to hold AGMs.

Business insights

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 as 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 sign up for our regular Covid-19 legal briefing.

Employer clients might like to ask their usual Osborne Clarke contact for our new guide: ‘Exiting from lockdown – Key issues for UK employers’.

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

The Pensions Regulator – Guidance for employers

The Pensions Regulator – Guidance for trustees

On 21 May 2020, TPR updated its guidance on DC scheme management and investment to include a section on when the temporary closure of investment funds will create a default arrangement and trigger additional compliance requirements. The guidance is aimed at cases where members have self-selected funds (for example, property funds) that have temporarily closed (gated) and the trustees, after taking investment advice, have started to redirect contributions into alternative funds until the gated funds re-open.

The Pensions Regulator – Guidance for providers

There are no new developments.

The Pensions Regulator – Other

On 18 May 2020, TPR issued a blog post in response to calls for it to rethink its first consultation on the new DB funding code in the light of Covid-19. The post explains why TPR is going to continue with the current consultation and how it will take the impact of Covid-19 into account when consulting on the Fast Track guidelines next year.

On 19 May 2020, the Work and Pensions Committee questioned TPR on its response to Covid-19. TPR’s answers include some important points for employers who are seeking to reduce future service, or defer DB deficit reduction, contributions.

On 26 May 2020, TPR issued a blog post on transfers. The blog post is essential reading for the trustees of all schemes.

The Pension Protection Fund

On 26 May 2020, the PPF published a guide for pension scheme members who are concerned about the impact of Covid-19 on their pension. The PPF prepared the guide in conjunction with the Financial Conduct Authority, the Money and Pensions Service, The Pensions Regulator, the Financial Services Compensation Scheme and the Pensions Ombudsman. Trustees and employers might like to flag the guide to members.

The Pensions Ombudsman

The Department for Work and Pensions

The Financial Conduct Authority

HMRC

On 27 May 2020, HMRC published pension schemes newsletter 120. The newsletter sets out further temporary changes to pension processes in light of Covid-19. It also confirms the approach that schemes and practitioners should take to raise queries about the pensions tax rules.

Money & Pensions Service

Pensions Administration Standards Association and the Pensions and Lifetime Savings Association

The Information Commissioner’s Office

The Pensions Advisory Service (TPAS)

The Pensions Management Institute

The Association of Professional Pension Trustees

The Office for National Statistics