NEWS   |    September 28, 2020

Partner Rosalind Connor comments in the Financial Times on The Pensions Regulator probing Covid pension suspensions for abuse

Regulators are investigating a number of companies’ pension schemes for suspected abuse of measures which allowed employers facing coronavirus-induced financial pressures to suspend payments into workers’ retirement funds.

As part of its response to the Covid-19 pandemic, The Pensions Regulator relaxed its guidance in March to allow distressed employers with defined benefit pension schemes to take payment holidays of up to three months.

In June, the regulator advised pension scheme trustees to not “unquestioningly” agree to extensions of these contribution holidays without checking if employers’ requests were appropriate.

The watchdog said it had received about 200 revised pension payment plans from schemes where employers had taken advantage of extensions to contribution holidays.

But the regulator also revealed it was questioning a number of schemes where it was not clear whether they had behaved appropriately.

The regulator declined to disclose how many schemes it was investigating. The watchdog’s emergency measures in March gave trustees scope to agree to employer requests for pension payment holidays of up to three months, without heavy scrutiny of the companies’ financial position.

Rosalind Connor commented:

“I do think the guidance was open to interpretation”.

Read Rosalind’s comments in the Financial Times.

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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