TPR updates its easements – October and January changes to note
Over the last few months, TPR has granted a raft of temporary easements in order to support employers and trustees through “these challenging times” and let them concentrate on the immediate risks the pandemic posed to their schemes.
A formal review and update had been expected before the expiry date of 30 September of some of the easements granted earlier in the year, and on 16 September, TPR updated its COVID-19 guidance on reporting duties and enforcement activity.
So where are we now?
With businesses and schemes “adjusting to a new normal”, TPR has decided that now is the right time to return to its usual reporting and enforcement in some areas.
From 1 October 2020 therefore, TPR will recommence:
• enforcing the requirement for schemes to submit audited accounts
• reviewing investment statements (SIPs and default arrangements)
• reviewing chairs’ statements submitted on and after that date.
Any chair’s statements received by TPR before 1 October (including in relation to master trusts) will be returned unread, and TPR warns that the absence of comment on such submissions “should not be taken as any indication that the statement in question complies with the requirements”.
From 1 January 2021:
Earlier in the year, TPR had extended the maximum period DC pension schemes’ trustees and providers had to report material late contributions from 90 to 150 days, in order to give employers more time before enforcement action was taken. But from 1 January 2021, DC schemes will be “asked” to resume reporting late contribution payments no later than 90 days after the due date. This will become mandatory by 1 April 2021.
TPR explains that the three-month lead in is to ensure both that schemes have sufficient time to adjust systems and processes and that “employers who suffered the effects of the pandemic have been afforded the additional time to work with their provider to bring any outstanding contributions up to date”.
Guidance for trustees considering employer requests for a reduction or suspension of deficit repair contributions (“DRCs”) remains unchanged for now, although it stays under review and will be updated “in line with the evolving situation”. TPR recognises that deferrals may continue to be appropriate in certain circumstances, subject to trustees undertaking appropriate due diligence, with TPR expecting greater insight into an employer’s short-term liquidity to have developed since the coronavirus lockdown began.
Although TPR maintains the line that it will continue to take a risk-based and proportionate approach to enforcement decisions, schemes should ensure they and their systems are ready for these changes. Of course, if the “new normal” is less “normal” than might have been hoped, it is possible that further allowances may have to be made in coming months…