The Pensions Regulator (TPR) has updated its Covid-19 (Coronavirus) guidance explaining what is to be expected of pension scheme providers
The guidance explains that from 1 January 2021, defined contribution (DC) schemes and providers will resume reporting late contributions no later than 90 days to ensure schemes have enough time to adjust to systems and processes for those who have experienced financial hardship during the pandemic. This is a reduction from the 150 days that TPR provided as an extension in March 2020 to aid trustees with the financial uncertainty towards the start of the pandemic.
Additionally, from 1 October 2020, enforcement will return to normal, including enforcing the requirement of schemes to submit audited accounts and statement reviews. The regulator will also resume reviewing chairs’ statements submitted on and after that date, as usual, all of which were halted to due to the difficulties of the Coronavirus pandemic.
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.”
Kate Smith, head of pensions at Aegon, added: “As expected, TPR is reverting to the 90 days backstop reporting of late payment of pension contributions. This was designed to give pension providers and trustees breathing space to allow them to focus on other priorities during the early days of the pandemic. Three months’ notice as well as the three-month window allows providers to deal with late payments already in the system as well as reinstate their original processes by reporting via the portal at 90 days late.
“It is important to stress that, as before, there has been no change to employers’ responsibilities to deduct and pass on the correct contributions to providers in line with their schedule of payments, unless they have made specific arrangements with their providers.
“Providers will continue to monitor pension payments to ensure they are paid correctly and on time. As we are likely to see an uptick in the number of savers being made redundant, providers will play an important role in making sure that savers receive the full pension contributions they are entitled to.”