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Law360, London (September 16, 2020, 5:43 PM BST) -- Pension trustees and providers will have to revert to pre-pandemic rules mandating that they report late or missing pension payments within 90 days from the beginning of 2021, Britain's pensions regulator said Wednesday.
The Pensions Regulator said that from Jan. 1, it expects pension providers and trustees to report missing payments within 90 days rather than the extended 150 days it allowed during the COVID-19 crisis.
The watchdog allowed providers more time to report missing or late payments during the pandemic in a bid to ease the burden on companies while they were in the grip of the crisis, but it announced Wednesday that companies should prepare to go back to business as usual.
"We acknowledge that this change back to 'business as usual' reporting will have an impact on providers' systems and processes, which is why we are providing three months for schemes to make the necessary adjustments," TPR said.
The regulator said it expects providers and trustees to adhere to the usual 90-day rule from Jan. 1, but it will not become mandatory until April 1.
It reiterated that pension providers and trustees are the first line of defense when it comes to making sure that employers are making correct contributions, and making them on time, on behalf of pension scheme members.
The pensions regulator also reminded companies that the relaxed rules for missed contributions during lockdown only ever applied to missed payments that were "material." All other delays should be reported as normal.
The guidance allowing extra time to report missed or late payments was introduced in April as a way of helping employers that were struggling to make contributions as a result of the COVID-19 lockdowns.
The regulator said in March that it would not take enforcement action against trustees that were late in reporting missed payments. But lawmakers warned in June that unscrupulous employers may overuse the leniency.
The parliamentary Work and Pensions Committee welcomed TPR's flexible approach during the crisis but said the regulator should be alert to the possibility of employers "taking advantage."
But the regulator announced in August that 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.
New data covering April to June showed there had not been a spike in missed pension payments during the global health crisis and that the majority of employers have continued to pay contributions as usual, the TPR said.
--Additional reporting by Martin Croucher. Editing by Alyssa Miller.
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