New guidance for employers on their automatic enrolment (AE) duties during the Coronavirus pandemic have been published today package of measures to safeguard pensions.
The TPR says employers continue to have automatic enrolment responsibilities but there can be some flexibility on when contributions are made.
The period in which schemes must report payment failures has been extended from 90 days to 150 days.
The TPR says it will support employers and only take a “proportionate approach” to any enforcement decisions.
While the minimum correct contributions must be made on time, the new information highlights flexibilities available to employers.
Employers can reduce their contributions to the statutory minimum if they are paying more and also ask providers for longer to pay contributions but they must not “induce” employees to opt out of an AE scheme if they do not wish to do so. Employees can opt out or reduce contributions.
Employers concerned they will struggle to make their contributions are urged by the TPR to speak to their AE pension provider. TPR has in turn written to providers asking them to be as “flexible as possible” when agreeing contribution payment dates.
Employers can also access information about the government’s Coronavirus Job Retention Scheme which allows them to claim back minimum AE employer contributions for furloughed staff.
TPR’s head of automatic enrolment, Joe Turner, said: "These are unprecedented times and we are acutely aware of the pressure employers are now under. While employers continue to have responsibilities, we are weaving in as much flexibility as possible to help employers and protect savers.
"We are continually reviewing and updating our guidance to respond to the challenges as they unfold. Further guidance will be published shortly outlining in more detail what employers can expect from us in the weeks and months ahead."
Steve Webb, consultant at LCP, said: “Under the Job Retention Scheme, employers are only reimbursed for the legal minimum level of pension contributions and many employers will have been contributing more than this, leaving a funding gap.
“In normal circumstances, employers would have to spend a couple of months consulting about a reduction in contributions but these are not normal circumstances. It seems proportionate to allow (smaller) employers to reduce contributions just for furloughed staff and just for the length of the furlough.”