Workplace pension scheme trustees and providers remain the first line of defence in ensuring employer contributions are made in full and on time. They have duties to monitor and seek to resolve outstanding payments and are best placed to work with employers struggling due to lockdown restrictions - and our COVID-19 guidance has helped them do this.
This guidance, which was due to be formally reviewed along with other COVID-19 guidance this month (September 2020), means that from 1 January 2021, DC schemes and providers will be asked to resume reporting late contribution payments no later than 90 days after the due date. The time frame for reverting to 90 days maximum late reporting has been set to ensure schemes have sufficient time to adjust systems and processes and to ensure employers who suffered the effects of the pandemic have been afforded the additional time to work with their provider to bring any outstanding contributions up to date.
TPR has been clear throughout the pandemic that employers must continue to make contributions in full and on time. The extension of the maximum period for reporting late payments reflected our proportionate approach to enforcement in light of the pressure on employers.
From 1 October, other types of enforcement will start to return to normal. This includes enforcing the requirement for schemes to submit audited accounts and investment statement reviews. TPR will also revert to reviewing chairs’ statements submitted on and after that date as usual.
TPR temporarily eased these requirements so trustees could concentrate on the immediate risks the pandemic caused to their schemes. It will continue to take a risk-based, proportionate approach to enforcement decisions.
Mel Charles, Director of Automatic Enrolment at TPR, said: “At the start of the pandemic, we took decisive and proportionate action to support employers and trustees through these challenging times. With businesses and schemes adjusting to a new normal, now is the right time to return to our usual reporting and enforcement.
“We have been clear that employers continue to have to pay contributions in full and on time and schemes have continued to refer serious automatic enrolment breaches to us which may require enforcement action to ensure compliance and to protect savers.
“Our indications are the majority of employers are paying their contributions in full and on time and we have not seen any unusual increase in reports of late payments by pension schemes.”
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