7 Days is a weekly round up of developments in pensions, normally published on Monday afternoons. We collate this information from key industry sources, such as the DWP, HMRC and TPR.
In this 7 Days
- Coronavirus – Sackers response
- Further guidance on corporate meetings, reporting and filings during Coronavirus crisis
- New HMRC and TPR guidance on furlough scheme and extended consultation easement
- PPI updates Pension Primer
- TPR’s quarterly compliance and enforcement bulletin
At Sackers we are committed to ensuring that the Coronavirus outbreak causes minimal disruption for our clients, and have taken several steps to ensure it is ‘business as usual’. For details of these steps, as well as key points for trustees and employers to consider in light of the outbreak (which we will continue to update), please see the dedicated section of our website, or talk to your usual Sackers contact.
On 8 June 2020, the FRC and BEIS updated their joint Q&A document on company filings and AGMs during the Coronavirus crisis (see 7 Days). The document now includes guidance on best practice for AGMs following the introduction of the Corporate Insolvency and Governance Bill 2020 to Parliament, which includes temporary easements for companies (see 7 Days) (though note this has not yet been passed).
Separately, the FRC published two reports on 15 June 2020 intended to “provide practical guidance to companies in areas of reporting that investors have highlighted as being most critical”. The first report provides “further practical advice to companies” following the FRC’s infographic issued in March “setting out the disclosures investors expect to see from companies during this time of uncertainty”. The second report “gives specific guidance on going concern, risk and viability disclosures”.
In addition, the London Stock Exchange has announced that AIM companies that need extra time to prepare their half-yearly reports will temporarily be given an additional month in which to notify them.
On 12 June 2020, HMRC released new guidance on how the extended Coronavirus Job Retention Scheme (“CJRS”) will change from 1 July, when furloughed employees will be able to work part-time and employers will have to meet an increasing proportion of furlough pay (see 7 Days). It has also updated a number of related pieces of guidance to reflect the changes.
The guidance confirms (similar to the previous guidance, but adding in references to part-time workers) that, from 1 August 2020, employers must pay furloughed employees 80% of their wages, up to a cap of £2,500 per month, for the time they are being furloughed, but the level of grant will be reduced each month:
- August: the Government will pay 80% of wages (up to a cap of £2,500) for the hours the employee is on furlough. Employers will pay employer NICs and pension contributions for those hours
- September: the Government will pay 70% of wages for the hours the employee is on furlough – up to a cap of £2,187.50. Employers will pay employer NICs, pension contributions and the remaining 10% of wages, to make up 80% in total (up to a cap of £2,500) for those hours
- October: the Government will pay 60% of wages for the hours the employee is on furlough – up to a cap of £1,875. Employers will pay employer NICs, pension contributions and 20% of wages to make up 80% in total (up to a cap of £2,500) for those hours.
Wage caps are proportional to the hours an employee is furloughed. For example, an employee is entitled to 60% of the £2,500 cap if they are placed on furlough for 60% of their usual hours. Employers will have to pay their employees for the hours worked.
TPR updated its COVID-19 guidance for employers on automatic enrolment and DC pension contributions on 15 June 2020, to recognise the above changes to the CJRS. This update includes new sections on working while on furlough, which explains how pension contributions should be calculated for furloughed employees working part-time after 1 July 2020, and employer contributions to the CJRS, which sets out how payroll and contributions should be run for September and October.
It also includes an extension to TPR’s easement for employers who do not run a full consultation for reducing pension contributions, under which TPR has said it will take no regulatory action provided that certain conditions are satisfied (see our Alert). This easement now applies until 30 September 2020 (previously 30 June). We expect to hear by the end of June whether any of TPR’s other easements have been extended beyond the end of the month.
Separately, HMT has confirmed that parents on statutory maternity and paternity leave who return to work after the 10 June cut-off for the extended CJRS will still be eligible for the scheme.
The PPI’s “Pensions Primer” gives a detailed description of the current pensions system and “some of the archaeology” of its various layers. It is intended for people wanting to learn about UK pensions policy.
The latest version reflects the current position of, and legislated future changes to, the UK pension system as at May 2020.
On 12 June 2020, TPR published its quarterly compliance and enforcement bulletin for January to March 2020, providing information about its cases and the powers it has used. Of note is the use of its powers to appoint 91 trustees, to issue 52 mandatory penalty notices for breaches of chair’s statement requirements, and to provide four clearance statements.