Giving you that extra support to help you stay on top of your duties

5 May 2020
The Government’s responding to these unprecedented social and economic challenges by pledging billions to support employers and their employees.

Yet having made these record smashing decisions, the government departments, along with The Pensions Regulator, had the difficult challenge of working through the detail and the impact it has on employers and their employees. 

Given the scale of the challenge, it’s no surprise that many employers are wondering how to manage their business through this crisis and do the right thing for their employees.  Pensions may not have been at the top of the priority list. However, both the Government and TPR have confirmed that automatic enrolment legislation will stay as it is.

Keep on going

So firstly, this means you’ll need to keep enrolling eligible jobholders into your pension scheme. You’ll also need to carry on calculating and paying contributions as normal.  And whilst the regulator has indicated they may be more pragmatic and flexible in their enforcement regime at this difficult time, it’s clear they’re still expecting contributions to be made.

And although the Job Retention Scheme portal is open and some payments have already been made, we know there are some employers who are struggling to make their contributions right now, due to the gap between when the contributions need to be paid and when the payments are received from the Job Retention Scheme. 

If you’re finding yourself in this situation, there are a few steps, which if you’re not doing so already, may save you problems further down the line:

  • Keep assessing your workforce and calculating the contributions – even if you can’t afford to pay the contribution now.  The regulator will still expect eligible employees to be enrolled into the pension scheme, and the usual enrolment information and opt out rights will need to be issued.  TPR will also expect the right contributions to be paid, even if they’re delayed.  If you do this as you go and keep good records – it will save you lots of work in the long run.  It also helps us, or any trustees keep the scheme records up to date.
  • Communicate with your employees – it is important to communicate with your employees, particularly when their pay or benefits, including pension contributions are being altered. 

    For example, if you’re currently paying more than the minimum employer contribution and you’re considering reducing this, you’ll need to let them know in advance.  There’s usually a formal consultation process around this for larger employers, however the regulator has relaxed this just now and issued guidance instead.  Changing employment rights, including any salary exchange agreements can be a complex area in contract and pensions law and getting financial or legal advice can help.
  • Get help and support, don’t just stop direct debits. If you’re concerned about making your contributions, speak to your financial adviser or to us.

    We can work with you to agree a payment plan which could help bridge the gap between when the contribution is due to be paid and receiving your grant from the scheme.  This will help keep you onside with the regulator, help you plan effectively and save time and effort in future.  If your scheme has trustees or an employee representative committee, it will also be worth speaking to them.
  • If in doubt, speak to TPR.  It’s best to make the regulator aware of any issues rather than just switching off.  They should be able to advise you on the best course of action.

This is clearly a difficult time for you and your employees, and given the restrictions, it can feel isolating too.  So if you’re needing support, speak to us, your financial adviser or TPR. 

The Royal London Mutual Insurance Society Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Registered in England and Wales number 99064. Registered office: 55 Gracechurch Street, London EC3V 0RL.