Among the updates is further guidance for trustees of defined benefit (DB) schemes facing employer requests to agree to suspend or reduce deficit repair contributions (DRCs). Trustees may agree these where it may be necessary to support employers navigating the challenges resulting from COVID-19.
However, the guidance now asks trustees to resume reporting certain key information to TPR to ensure risks are being managed and savers protected.
Charles Counsell, TPR's Chief Executive, said: "COVID-19 has had a huge impact on us all and so during this unprecedented time we have continued to listen and talk to trustees and employers.
"We are determined to help where we can by taking a pragmatic approach while remaining focused on the need to protect savers.
"The information we issued in March and April remains relevant and today’s updated guidance outlines how we are continuing to support schemes in these challenging times.
"In making decisions on regulatory action, we will continue to do so on a case-by-case basis and take a flexible and pragmatic approach where breaches are COVID-19 related. As such, we feel the resumption of some reporting is now important."
While data shows around 10% of DB schemes have sought to defer DRCs, with discussions ongoing for others, TPR recognises that there is a need for deferrals to continue.
Trustees of DB schemes should continue to be open to requests from employers to delay DRCs. This should be subject to their undertaking due diligence, particularly since TPR expects greater insight into an employer's short-term liquidity to have developed since the COVID-19 lockdown began.
Trustees remain the first line of defence for a well-supported DB scheme and today’s information clarifies TPR’s expectations.
There continue to be impacts on DB schemes’ funding positions and covenants. Conditions remain highly uncertain although visibility is improving for many employers. Cash equivalent transfer values (CETVs) were suspended for a small number of schemes during the period of market volatility but a normal level of activities now appears to be resuming.
From 1 July, pension trustees should resume reporting information to TPR. This will ensure the regulator is able to horizon-scan effectively, identify risks and act as necessary to protect savers.
Areas TPR expects trustees to report details of include:
• suspended or reduced contributions – TPR will expect a revised recovery plan or a report of missed contributions
• late valuations and recovery plan not agreed
• delays in CETV quotations and payments
Today’s updates also address other key areas:
• Late payments: TPR will continue to give defined contribution and automatic enrolment providers 150 days to report late payments of contributions. Previously, TPR required information on late payments within 90 days. This will be reviewed at the end of September 2020, as the results of the 150-day reporting period would not be seen until that time.
• Pension transfers: Trustees should continue to issue a letter template (PDF, 2 pages, 171kb) to all members requesting a CETV quote and monitor requests for concerning patterns. Trustees who identify unusual or concerning patterns should contact the FCA on DBTransferSchemeInformation@fca.org.uk.
• Annual benefit statements: TPR is continuing to take a pragmatic 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.
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