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
- Extension to company filing obligations
- DWP research on AE and new employers
- FCA regulated fees and levies 2020/21
- Call for input on dashboard data standards
- PLSA and Investor Forum Stewardship Guide
- TPR guidance on moratoriums for employers in financial difficulty
- TPR annual funding statement analysis 2020
- Updated TPR guidance on temporary closure of investment funds
- Update on TPR activities during COVID-19
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.
The Companies etc. (Filing Requirements) (Temporary Modifications) Regulations 2020 have been made under powers set out in the Corporate Insolvency and Governance Act 2020 (see 7 Days and our upcoming Alert). The regulations temporarily extend various filing deadlines, with the aim of providing “relevant entities with breathing space to enable them to focus on the health of their workforce and their business during the period affected by the COVID-19 pandemic”. The regulations apply to relevant filing deadlines that fall between 27 June 2020 and 5 April 2021.
Examples of the extensions for companies are:
- the accounts filing deadline will be extended by 3 months, to 12 months for private companies and 9 months for public companies
- the 14-day deadlines for submitting notices of relevant events after they occur are extended to 42 days. Examples of relevant events include a change of director or person of significant control
- the 21-day deadline for registering a charge against a company’s assets is extended by 10 days, to 31 days.
There are also changes for other entities, including Scottish partnerships and LLPs.
Guidance was published on 1 July 2020 on how the temporary measures impact entities filing documents or notices with Companies House.
On 3 July 2020, the DWP published qualitative research (and an accompanying summary document) on the experiences of “newborn employers” (broadly, employers who came into existence between 2012 and 2019) and their workers when implementing AE. The main findings of the research include that employers typically viewed AE as “a positive measure in helping workers save more for retirement”; “most employers found the cost and time involved in implementing automatic enrolment to be lower than they had anticipated”; and workers who remained enrolled “typically spent little time considering the idea”.
On 2 July 2020, the FCA published a Policy Statement setting out its 2020/21 fees and levies, including those for the FCA, FOS and MAPS. It also published feedback on the responses received to its consultation on the draft fees and levies rules (see 7 Days).
The FCA has an online fees calculator that firms can use to work out their individual fees. It will invoice fee-payers from July 2020 onwards for their 2020/21 periodic fees and levies.
On 6 July 2020, the Pensions Dashboards Programme (“PDP”), set up by MAPS, launched its call for input on data standards for the pensions dashboards, examining the working papers on data scope and definitions published in April (see 7 Days). The PDP is now formally seeking input on questions related to these papers, which “will help the PDP deliver an initial set of data standards”. Responses should be submitted by 31 August 2020.
On 1 July 2020, the PLSA and Investor Forum published a new guide which aims to provide “a practical and accessible toolkit to help pension schemes assess the effectiveness of their asset managers’ delivery of stewardship”. The guide “focuses on the key questions that schemes need to ask their asset managers to ensure they are effectively engaging” on schemes’ and savers’ behalves. It also provides “a framework against which to assess the quality of asset managers’ engagement and stewardship work”.
The guidance includes the PLSA’s and Investor Forum’s views on:
- definitions of stewardship and engagement, and their application across different asset classes
- an outline of how to frame an overall pension scheme stewardship strategy
- a framework for understanding and distinguishing between different forms of engagement
- an overview of what effective engagement looks like and the key factors for successful delivery
- the key questions schemes need to ask of their asset managers.
TPR has published guidance relating to the new provisions in the Corporate Insolvency and Governance Act 2020 allowing companies in financial difficulty to apply for a moratorium so that they can explore rescue and restructuring options (see 7 Days and our upcoming Alert). The guidance sets out the process for a monitor (the insolvency practitioner acting in relation to a moratorium) to notify TPR if a company entering a moratorium is or has been the sponsoring employer of a DB scheme, and when a moratorium is extended or brought to an end. TPR does “not expect to be notified where an employer no longer has any obligation to a pension scheme providing defined benefits”.
TPR “will take a risk-based approach, reviewing and assessing the information … against a range of risk indicators”. It “may ask for extra information in the first instance”. The guidance also notes that all contributions due in respect of the company’s employees who are members of any occupational pension scheme must still be made during a moratorium.
On 30 June 2020, TPR published its analysis of the expected positions of DB pension schemes with valuation dates between 22 September 2019 and 21 September 2020 (known as Tranche 15 or T15).
The analysis “gives further context” to TPR’s 2020 Annual Funding Statement (see our Alert) and is aimed at a more technical audience.
The report acknowledges the “significant and uneven impact of the COVID-19 crisis on scheme employers” throughout, and notes that it has excluded trends in employer affordability from this year’s analysis for that reason.
TPR updated its DC scheme management and investment: COVID-19 guidance for trustees on 30 June 2020, amending the section on temporary closures of investment funds (or “gating”) creating default arrangements (see 7 Days).
The updated guidance includes advice on redirecting contributions back into the original fund when it reopens. It warns that “if, having taken legal advice, you determine that the pre-existing expression of choice no longer applies, and contributions are directed back to the original fund without obtaining a new expression of choice from the member, that original fund would fall within the definition of a ‘default arrangement’”. Whether or not a member’s pre-existing expression of choice still applies “will depend on the individual circumstances, including the precise terms of the consent given, and of any correspondence with members after the fund was gated”.
On 2 July 2020, TPR updated the webpage on its activities during COVID-19. It has removed references to the corporate plan being delayed, as this was published on 29 June (see 7 Days). In terms of supervision, TPR is “currently contacting” the schemes it is supervising to set out how it “will be engaging with them in the short term”. This includes setting out expectations where TPR has “identified specific areas to discuss”. TPR will “continue to review” its engagement with schemes with a view to returning to its full evaluation cycle “later in the year”.