TPR: COVID-19 updates for pension trustees, employers and administrators
The Pensions Regulator (TPR) has launched an area on its website for COVID-19 updates for pension scheme trustees, sponsoring employers and administrators. Further updates are likely in the coming weeks as TPR responds to feedback, intelligence and the evolving risks.
TPR highlights that trustees of both defined benefit (DB) and defined contribution (DC) schemes, employers and administrators should focus their activities on the following key risks to pension savers:
- The need for benefits to be paid
- Minimising the risk of scams
- Employers need to continue contributing
- Savers need support to make good decisions in these challenging circumstances
- Some administrative breaches of the law may occur and TPR will maintain a proportionate and fair approach to any action it may take
TPR then:
- Sets out its expectations of trustees
- Highlights the need to help protect scheme members from scams
- Provides guidance for administrators
- Highlights matters for employers
TPR is temporarily suspending its planned regulatory initiatives. The regulator does advise, however, that it will be maintaining one-to-one relationship supervision and rapid response work to enable two-way contact with trustees, managers and sponsoring employers during this time.
In its most recent update at the time of writing, TPR has issued the following guidance:
- We do not expect DB trustees who are close to completing their triennial actuarial valuations to revisit their valuation assumptions.
- If DB trustees need more time to consider the scheme’s and sponsoring employer’s situation, the trustees may decide to delay their recovery plan submission by up to three months, and in that case, we will not take regulatory action in respect of a failure to submit.
- DB trustees should be open to requests to reduce or suspend Deficit Recovery Contributions (DRCs) in line with the principles set out in our guidance published on 20 March. Where sufficient information is not available to make a fully informed decision, DB trustees may, where appropriate, agree to a reduction or suspension of DRCs for as limited a period as possible while appropriate information is provided. This should not be longer than three months. We expect the scheme to be fairly treated compared to the other stakeholders of the employer. Employers and trustees should seek to work closely together and share relevant information.
- DB trustees may decide to suspend cash equivalent transfer value (CETV) activity for up to three months if this is in the best interests of their scheme’s members.
- DC trustees should consider how individual members might react in the current environment to headline market/ fund value falls or reduction/ loss in earnings. Scheme members could make inappropriate decisions, crystallise losses, or be exploited by scams.