Regular round-up of the latest pensions, investments, trusteeship and scheme management news
Current Issues - May 2020
01 May 2020 - Estimated reading time: 10 minutes
See excerpts from this month's articles below (to read more, please download our latest Current Issues):
Annual Funding Statement 2020: the one with COVID-19
The Pensions Regulator has published its annual funding statement for defined benefit (DB) schemes. It is primarily for schemes with valuation dates in the period from 22 September 2019 to 21 September 2020, giving them guidance on how to conduct the valuation and set their recovery plans. Unsurprisingly, COVID-19 looms heavily over the guidance. The Regulator encourages close trustee – employer cooperation in the months to come in response to the pandemic, but reminds them not to neglect longer-term planning and risk management.
COVID-19: auto-enrolment in DC schemes
The Pensions Regulator has published guidance for employers on the implications of the COVID-19 pandemic for automatic enrolment (AE) via defined contribution (DC) schemes. The headlines are that AE duties continue as normal, but that there is some flexibility already available within the system and the Coronavirus Job Retention Scheme (CJRS) allows employers to recover some of their pension costs. Worked examples illustrate some issues that arise for employers using salary sacrifice or the alternative AE quality requirements, and the Regulator announces a relaxation of the statutory consultation requirements in some circumstances.
COVID-19: reporting duties
The Pensions Regulator has published guidance on reporting duties and enforcement activity during the COVID-19 pandemic.
The Regulator has decided to adopt a ‘more flexible approach’ to what it expects from those involved in running an occupational pension scheme to report to it. In general, breaches resolved within three months, without negative consequences for members, need not be reported and will not provoke enforcement action, though records should be kept. The easements will remain in place until 30 June 2020, but will be kept under review to see whether more flexibility is required in specific areas over the following weeks, and whether the end date for the easements should be extended.
COVID-19: communicating with members
The Pensions Regulator has published guidance on communicating to pension scheme members during the pandemic. The intention is to help members avoid making rash decisions as a result of the current crisis. In particular, the Regulator is asking trustees to send a template letter to defined benefit (DB) members who request a cash equivalent transfer value (CETV) quotation.
PPF insolvency scoring 2021/22
The Pension Protection Fund (PPF) has issued a policy statement on Insolvency Scoring from 2021/22, confirming that ‘the basis for scoring will be substantially unchanged from that consulted on’ in December 2019.
The December consultation set out proposed changes to the scoring methodology and a move from Experian to Dun and Bradstreet (D&B) for calculating the risk of an employer becoming insolvent. The PPF’s policy statement reports that respondents were largely supportive of its proposals and that they will be adopted. The 2021/22 levies will be based on the insolvency scores for the 12-month period to 31 March 2021, with live scores being provided by D&B from April 2020.
Pensions dashboards update
The Money and Pensions Service (MaPS) has published a report from the Pensions Dashboards Programme (PDP) on the progress made so far, and the work that still needs to be undertaken before dashboards can be made available to the public.
The PDP (formerly known as the Pensions Dashboards Industry Delivery Group) is responsible for delivering the digital architecture and governance framework that is needed to support the development and operation of the dashboards.
Pension Schemes Newsletter 119
In its latest Newsletter, Her Majesty’s Revenue and Customs (HMRC ) sets out further temporary changes to pension processes to help scheme administrators during the COVID-19 pandemic...
Managing Pension Schemes Service Newsletter—April 2020
A new Managing Pension Schemes Service Newsletter is available. Accounting for Tax returns can now be submitted via the service, and HMRC has revised the timetable for various developments during Phase 2 of delivery.
Countdown Bulletin 52
Countdown Bulletin 52 says that HMRC now hopes to publish its timetable for the issue of final GMP data cuts by the end of April 2020.