Guidance designed to help pension scheme trustees and employers cope with the financial impact of COVID-19 has been updated by The Pensions Regulator (TPR).
Among the updates is further guidance for trustees of defined benefit (DB) schemes facing employer requests to agree to suspend or reduce deficit repair contributions (DRCs).
Trustees may agree to such terms where it may be necessary to support employers navigating the challenges resulting from COVID-19. However, the guidance now asks trustees to resume reporting certain key information to TPR to ensure risks are being managed and savers protected.
While data shows around 10 percent of DB schemes have sought to defer DRCs, with discussions ongoing for others, TPR recognises that there is a need for deferrals to continue.
The regulator said trustees of DB schemes should continue to be open to requests from employers to delay DRCs. This should be subject to their undertaking due diligence, particularly since TPR expects greater insight into an employer’s short-term liquidity to have developed since the COVID-19 lockdown began.
From July 1, pension trustees should resume reporting information to TPR. This will ensure the regulator is able to horizon-scan effectively, identify risks and act as necessary to protect savers.
Areas TPR expects trustees to report details of include: