NEWS   |    May 15, 2020

Partner Rosalind Connor comments in Pensions Expert on the challenges the lockdown has imposed on trustees and how they are adapting to them

A global pandemic has forced most countries to enter lockdown; social distancing is now a buzzword, and the conferencing app Zoom has a capital value in excess of some commercial airlines. With the majority of employees being forced to work from home, DB schemes and their employers have had to adapt.

For some, which had rules unchanged since the 1960s and 1970s, trust deeds have had to be amended to even allow decisions to be made without having a physical trustee meeting.

This is just one of many hurdles trustees and pension professionals have had to face in a time of overnight and radical changes to working methods and the process for changing deeds is particularly difficult.

Rosalind Connor commented:

“If you need to amend the rules by the way of a deed and you have individual trustees, you’re going to have to get everyone to print off a copy and sign it in front of a witness, and send them all back to someone who is going to date them all at the same date, and then it is going to be valid.”

“Trustees are now considering whether alterations can be made via a contract, or made retrospectively. There will be an awful lot of documentation happening in the first month or two after we all get back into our offices.”

When asked about trustees worries at present, Rosalind commented that there are three main things trustees are panicking about:

“First is the strength of the employer, employers asking for delays, employers canceling their direct debit payment, which doesn’t necessarily mean they’re not going to pay, it means that they may be delaying it. We have had quite a lot of helpful guidance from the Regulator on that. They have been really helpful in saying keep an eye on it but don’t report it if it’s just three months, which gives employers a three-month grace period, which is very helpful at the moment.”

“Secondly, people are nervous about their providers being able to provide fully for resources, the big one being their administrator. If your administrator has a lot of people off sick, or off looking after children, or something else at the moment, does that mean that you are not going to be able to do everything right. Again the Regulator has been very useful in saying what should be prioritised. They are currently saying to make sure the money comes in and the money goes out and that’s the most important thing. And, yes, obviously it’s important to communicate with people and it’s a really good idea too, but that is going to take a bit longer.”

“Then, thirdly I think there is an increased worry about scams. The Regulator has warned on it, and I think it’s making everyone nervous about whether we going to suddenly find ourselves in a place where the scam merchant, the absolute criminals, are off saying this is a great time to panic people, phone them up, and say you really need to move your money somewhere safe. That’s a very difficult place for trustees to be and at the moment, and the fear is that it’s going to be difficult to keep an eye on that.”

Read Rosalind comments in Pensions Expert.

The views in this article are intended for general information purposes only and should not be used as a substitute for professional advice. Arc Pensions Law and the author(s) are not responsible for any direct or indirect result arising from any reliance placed on content, including any loss, and exclude liability to the full extent. Always seek appropriate legal advice from a suitably qualified lawyer before taking, or avoiding taking, any action. If you have any questions on the points raised in the above, please do not hesitate to get in touch.

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