Covid-19: Pensions developments tracker | 23 – 30 April 2020

Written on 4 May 2020

This tracker is a summary of the legal and regulatory developments arising out of the Covid-19 pandemic which will be of interest to the trustees and employers of occupational pension schemes. The tracker will be updated on a regular basis throughout the Covid-19 pandemic. This version relates to developments between 23 and 30 April 2020.

How to use the tracker: The tracker is divided into different subjects. The column on the left hand side of the table shows whether the development applies to defined benefit schemes (DB), defined contribution schemes (DC) or both (All). You can access the insights, guidance and other documents that are named in orange by clicking on them.

If you would like advice on any of the points raised in this tracker, please get in touch with your usual Osborne Clarke contact, Jonathan Hazlett (Head of Pensions) or Jennifer Alldridge (Senior Knowledge Lawyer).

Covid-19 related schemes, legislation and business insights

Schemes

All

Coronavirus Job Retention Scheme

On 23 April 2020, HMRC updated its guidance for employers and employees to include new information on reaching collective agreement with a trade union and to clarify eligibility criteria, including for employees on fixed-term contracts.

HMRC has also updated its Work out 80% of your employees’ wages guidance. On 23 April 2020, the ‘How to claim’ section was updated and HMRC moved information on how to treat grant payments in Real Time Information to separate guidance. On 27 April 2020, HMRC made changes in relation to employees who are paid variable amounts.

Legislation

All

Government confirms steps taken to protect savers, schemes, trustees, employers and pensioners

On 27 April 2020, the Government confirmed the key steps it is taking to protect savers, schemes, trustees, employers and pensioners. These include: revoking the planned increase to the general pensions levy (reported in our first tracker); introducing the Coronavirus Job Retention Scheme (which gives employers some help with the cost of employer pension contributions); guidance from the Pensions Regulator; working with regulators, industry bodies and providers to try to protect savers from pension scams; and measures in relation to the state pension.

Business Insights

All

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 MAC 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

Regulatory and industry bodies

The Pensions Regulator – Guidance for employers

DB

Annual funding statement

On 30 April 2020, TPR published a press release and its annual funding statement 2020. The annual funding statement includes guidance on a number of Covid-19-related issues, making it essential reading for employers and trustees.

The Pensions Regulator – Guidance for trustees

All

Communicating to members during Covid-19

On 29 April 2020, TPR released guidance and resources for trustees and administrators (including the pensions managers of public service pension schemes) on communicating with members during the Covid-19 pandemic. The guidance sets out: principles for, and TPR’s expectations around, communication with members; the action that trustees should take if a member asks to transfer or access their benefits (and, where a DB member asks for a cash equivalent transfer value quote, the resources include a template letter which trustees must send); the action trustees should take if a member asks to opt-out; the action trustees should take to help to protect members from scams; and messages trustees should consider giving to DC members.

The trustees of DB schemes should also note the ‘annual funding statement’ entry above.

The Pensions Regulator – Guidance for providers

All There are no new developments this week.

The Pensions Regulator – Other

All There are no new developments this week.

The Pension Protection Fund

DB

Impact of Covid-19 on levy payers

On 28 April 2020, the PPF issued a press release to address media speculation that PPF levy payers would see a significant increase in their levy bill this year due to Covid-19. The statement confirms that the PPF expects the impact on this year’s levy bills to be minimal, in part because most of the information used to calculate levy invoices will have been collected before the economic effect of Covid-19 started to be felt. It also confirms that the PPF appreciates that Covid-19 could affect ability to pay (and is reviewing options around this) and that the PPF will consider the impact of the pandemic when setting the rules for levy invoices in 2021/22 onwards.

The Pensions Ombudsman

All There are no new developments this week.

The Department for Work and Pensions

All There are no new developments this week.

The Financial Conduct Authority

All There are no new developments this week.

HMRC

All

Temporary tax change to protect pensions of returning key workers

The Economic Secretary to the Treasury has announced plans to temporarily suspend certain pensions tax rules in order to protect the pension income of key workers in the public sector who return to work in response to the Covid-19 pandemic. The suspension will protect recently retired people aged between 50 and 55 from “significant tax charges” to their pension income. Further information is contained in pension schemes newsletter 119, discussed immediately below.

All

Further temporary changes to pensions processes

On 30 April 2020, HMRC published pension schemes newsletter 119, giving details of further temporary changes to pensions processes in light of Covid-19. There are changes: relaxing the protected pension age rules for key workers in the public sector following the recent announcement by the Economic Secretary to the Treasury (see immediately above); a decision not to issue any notices to file pension scheme returns for 2019/20; an easement around benefit crystallisation event 1 where funds are being designated for drawdown; and comment in relation to other circumstances in which pension scheme assets are being valued.

All

Update on tax policy documents

On 28 April 2020, HM Treasury and HMRC announced three-month extensions to a number of open consultations and calls for evidence (including on the tax treatment of asset holding companies in alternative fund structures), together with a potential delay in issuing a series of tax policy documents announced at the Spring 2020 Budget, and a delay or potential delay in publishing other named documents (including the review of the UK funds regime).

Money & Pensions Service

All There are no new developments this week.

Pensions Administration Standards Association and the Pensions and Lifetime Savings Association

All

PLSA: Top tips for workplace pension savers

On 27 April 2020, the PLSA published a guide for workplace pension savers “to explain what happens to your workplace pension under a range of circumstances brought about by [Covid-19] and provide… tips on what to do about your pension”. Trustees might wish to refer members to the guide.

The Information Commissioner’s Office

All There are no new developments this week.

The Pensions Advisory Service (TPAS)

All There are no new developments this week.

The Pensions Management Institute

All

Professional trustee accreditation

On 24 April 2020, the PMI announced the first accredited professional trustee in the UK. It also set out the steps that professional trustees can take to obtain PMI accreditation at this time.

The Association of Professional Pension Trustees

All

Professional trustee accreditation

On 27 April 2020, the APPT announced that it is opening its accreditation process for professional trustees in spite of the Covid-19 pandemic. It will accept applications for full and provisional accreditation and is holding a webinar for members on the accreditation process on 6th May 2020.