The Pensions Regulator (TPR) has made changes to regulations to support employers and trustees as they work to meet the challenges of the Covid-19 (Coronavirus) pandemic.
Trustees of defined benefit (DB) schemes will be able to suspend cash equivalent transfer value activity for up to three months.
According to the regulator, if trustees need more time to consider the scheme and employer situation, they can delay their recover plan by up to three months and will not incur regulatory action. The regulator does not expect defined benefit (DB) trustees who are close to completing their valuations to revisit their valuation assumptions.
DB trustees can also request to reduce or suspend deficit recovery contributions for a limited period of time if the right information is provided, however, this should not be longer than three months. To aid this cause, employers and trustees need to work closely together to share the appropriate information.
TPR has also recommended that trustees of defined contribution (DC) schemes should consider the impact that the Coronavirus pandemic may have on individual members, noting that they may make inappropriate decisions or be exploited by scams.
A statement published by the regulator read: “We will provide further guidance in the coming weeks and months once we have a better idea of the extent of the crisis, its possible impacts and the package of measures that governments and other organisations intend to adopt.”
David Fairs, executive director of policy at TPR, added: “The significant measures and clear guidance we are announcing reflect the unprecedented and challenging situation trustees and employers find themselves in. The current scheme funding regime is flexible enough to cope with the impact of a severe economic downturn.
“However, we are actively considering what additional support and guidance we need to provide now so that those who manage and contribute to people’s savings can take the right steps to ensure adequate protection, recognising the challenging situation some scheme sponsors are in.
“We will continue to take a reasonable, pragmatic and proportionate approach in the weeks and months ahead and we call on trustees to follow the guidelines closely to make well-balanced decisions.”