Pensions360

The government's Coronavirus Job Retention Scheme (CJRS) has thrown a lifeline to many employers and to their employees who might otherwise have lost their jobs in the current Covid-19 crisis.  For employers taking advantage of the CJRS (and the trustees of an employer's pension scheme), the scheme gives rise to several pensions-related issues, in particular:

• how pension contributions should be calculated;
• dealing with salary sacrifice arrangements;
• reducing contributions to the auto-enrolment minimum;
• auto-enrolment duties in respect of furloughed employees;
• the impact on benefits from open defined benefit (DB) schemes;
• the position of furloughed trustees; and
• life assurance benefits.

Our attached note sets out our current understanding of how these issues may be addressed, based on the recently issued Direction from HM Treasury and updated guidance from HMRC and the Pensions Regulator. 

The Pensions Regulator has published guidance on how it expects pension contributions to be paid during the current pandemic and, in particular, in respect of employees on furloughed leave. 

The COVID 19 crisis has changed the landscape for pension scheme trustees. 

The note discusses the potential impacts and actions trustees should consider taking in relation to the following areas:

• Governance
• Maintaining business as usual
• Investment
• Funding and covenant issues
• Pension Protection Fund
• Contributions and benefits
• Death benefits
• Transfers out
• Regulation
• Current projects
• Disputes

To discuss any issues arising from this note, please speak to your usual Hogan Lovells contact, or alternatively one of our pensions partners.