Pandemic Hasn't Stopped Pension Payments, Watchdog Says

By Lucia Osborne-Crowley
Law360 is providing free access to its coronavirus coverage to make sure all members of the legal community have accurate information in this time of uncertainty and change. Use the form below to sign up for any of our weekly newsletters. Signing up for any of our section newsletters will opt you in to the weekly Coronavirus briefing.

Sign up for our Employment UK newsletter

You must correct or enter the following before you can sign up:

Select more newsletters to receive for free [+] Show less [-]

Thank You!



Law360, London (August 27, 2020, 2:30 PM BST) -- Employers have continued to pay into their staff's pension pots during the COVID-19 crisis despite fears that the financial fallout of the pandemic would grind pensions contributions to a halt, The Pensions Regulator said Thursday.

TPR said the new data covering April to June shows there has not been a spike in missed pension pensions during the global health crisis and that the majority of employers have continued to pay contributions as usual.

The data also showed that enforcement actions in the sector fell 55% in those three months due to the temporary measures the watchdog offered to employers to help them with the pandemic, which included giving struggling businesses more time to work with their providers before taking enforcement action.

The number of times the regulator used its enforcement powers to correct automatic enrollment breaches fell from 35,174 between January and March to 15,733 between April and June.

"In the early months of the pandemic, we recognized the challenges facing employers and took swift and decisive action to support them through the crisis," said Mel Charles, director of automatic enrollment at TPR.

"We gave employers more time to work with their pension provider to ensure pensions contributions continued to be made and, in line with our risk-based proportionate approach, we took enforcement decisions in light of pressures on businesses caused by COVID-19," Charles added.

The watchdog warned that it would continue to keep a close eye on compliance and would take action against any employers that fail to pay their contributions.

But the regulator noted that it will shortly be returning to "normal levels of enforcement activity" as the COVID-19 lockdowns are lifted.

"The pandemic has been a difficult time for everyone, including trustees," said Nicola Parish, executive director of frontline regulation at TPR.

"At the start of the pandemic we acted quickly to temporarily pause certain types of enforcement against trustees to ensure they could focus on addressing the most critical risks to schemes," Parish added.

The regulator said in March that employers could suspend deficit contributions for defined benefit pensions for up to three months without the threat of enforcement action.

But lawmakers warned in June that unscrupulous employers may overuse the leniency.

The parliamentary Work and Pensions Committee that it welcomed the flexible approach of The Pensions Regulator during the crisis but that it should be alert to the possibility of employers "taking advantage."

--Additional reporting by Martin Croucher. Editing by Rebecca Flanagan.

For a reprint of this article, please contact reprints@law360.com.

Hello! I'm Law360's automated support bot.

How can I help you today?

For example, you can type:
  • I forgot my password
  • I took a free trial but didn't get a verification email
  • How do I sign up for a newsletter?
Ask a question!