Personnel Today
  • Home
    • All PT content
  • Email sign-up
  • Topics
    • HR Practice
    • Employee relations
    • Learning & training
    • Pay & benefits
    • Wellbeing
    • Recruitment & retention
    • HR strategy
    • HR Tech
    • The HR profession
    • Global
    • All HR topics
  • Legal
    • Case law
    • Commentary
    • Flexible working
    • Legal timetable
    • Maternity & paternity
    • Shared parental leave
    • Redundancy
    • TUPE
    • Disciplinary and grievances
    • Employer’s guides
  • AWARDS
    • Personnel Today Awards
    • The RAD Awards
  • Jobs
    • Find a job
    • Jobs by email
    • Careers advice
    • Post a job
  • Brightmine
    • Learn more
    • Products
    • Free trial
    • Request a quote
  • Webinars
  • Advertise
  • OHW+

Personnel Today

Register
Log in
Personnel Today
  • Home
    • All PT content
  • Email sign-up
  • Topics
    • HR Practice
    • Employee relations
    • Learning & training
    • Pay & benefits
    • Wellbeing
    • Recruitment & retention
    • HR strategy
    • HR Tech
    • The HR profession
    • Global
    • All HR topics
  • Legal
    • Case law
    • Commentary
    • Flexible working
    • Legal timetable
    • Maternity & paternity
    • Shared parental leave
    • Redundancy
    • TUPE
    • Disciplinary and grievances
    • Employer’s guides
  • AWARDS
    • Personnel Today Awards
    • The RAD Awards
  • Jobs
    • Find a job
    • Jobs by email
    • Careers advice
    • Post a job
  • Brightmine
    • Learn more
    • Products
    • Free trial
    • Request a quote
  • Webinars
  • Advertise
  • OHW+

Auto-enrolmentCoronavirusLatest NewsInformation & consultationFurlough

Pensions Regulator relaxes enforcement of contribution reduction rules

by Ashleigh Webber 16 Apr 2020
by Ashleigh Webber 16 Apr 2020 Shutterstock
Shutterstock

Employers’ obligations under the pensions automatic enrolment rules continue to apply, but the Pensions Regulator has made a number of concessions to help employers struggling with cash flow during the Covid-19 crisis.

Guidance published this month says the regulator will relax its requirement for a 60-day minimum consultation period for companies with at least 50 employees if those with a defined contribution (DC) pension scheme wished to reduce their contribution level, provided certain criteria are met.

We strongly recommend that any employer that is proposing to reduce its employer contribution rates in accordance with the relaxation fully documents the steps it has taken to ensure it has a full paper trail if the regulator subsequently starts to ask questions,” – Penny Cogher, Irwin Mitchell

It will not take enforcement action if staff have been furloughed; if the reduction only applied to furloughed staff; the reduction only applied during the furlough period; and if the affected staff had been written to. This relaxation applies until 30 June 2020.

Penny Cogher, pensions partner at law firm Irwin Mitchell, said: “A full 60-day consultation is still required if the employer wants to change employer contributions outside this relaxation of the pension consulting requirements.

“We strongly recommend that any employer that is proposing to reduce its employer contribution rates in accordance with the relaxation fully documents the steps it has taken to ensure it has a full paper trail if the regulator subsequently starts to ask questions.”

The guidance says: “We know this is a challenging time for everyone and we recognise the strain this is putting on employers.”

“We are working with HM Treasury and the Department for Work and Pensions to feed into the Coronavirus Job Retention Scheme’s central guidance on the pensions element of the grant.

“We will take a proportionate and risk-based approach towards enforcement decisions, in light of these challenging times, with the aim of supporting both employers and savers.”

The guidance emphasises that employers’ usual automatic enrolment, re-enrolment and re-declaration duties continue to apply, even if staff have been furloughed. However, there are situations where organisations can postpone some of their responsibilities – for example, where an employer is struggling to complete its re-enrolment duties on the third anniversary of its staging date, it can choose a date up to three months after its anniversary to assess its staff.

Employers and staff are still obliged to make pension contributions in line with the rules of their pension scheme, but employees may choose to either reduce their contribution level or opt out of the scheme if they need to. Employers are not allowed to encourage or induce staff to make this decision, and the employee must be put back into the scheme at the next re-enrolment date.

The Pensions Regulator recognised that companies might have cash flow issues that make it difficult for them to maintain pension contributions, and encouraged them to talk to their pension provider to consider changing their payment date, or make use of the government support available, including the Coronavirus Job Retention Scheme.

Sign up to our weekly round-up of HR news and guidance

Receive the Personnel Today Direct e-newsletter every Wednesday

OptOut
This field is for validation purposes and should be left unchanged.

It says: “We appreciate that this is a challenging time in terms of cash flow and resources. The government recently announced that the Coronavirus Job Retention Scheme would include the employer’s statutory minimum AE contribution. If you make a claim for a grant (to cover the lower of 80% of furloughed worker’s salary or wage or £2,500 per month), you will also be able to claim the statutory minimum employer pension contribution on those wages.”

The statutory minimum contribution is 8% of an employees’ wages – at least 3% from the employer and the rest made up by the employee.

Ashleigh Webber

Ashleigh is a former editor of OHW+ and former HR and wellbeing editor at Personnel Today. Ashleigh's areas of interest include employee health and wellbeing, equality and inclusion and skills development. She has hosted many webinars for Personnel Today, on topics including employee retention, financial wellbeing and menopause support.

previous post
Regional jobs analysis reveals towns hit hardest by coronavirus crisis
next post
Employee sentiment rises across supermarket sector

You may also like

TPT to launch multi-employer CDC pension scheme

12 May 2025

Millions at risk of retiring under-pensioned

30 Apr 2025

Two-thirds of healthcare workers threaten to quit without...

31 Mar 2025

Employee Benefits Awards 2025 shortlist revealed

24 Mar 2025

Boost pensions via salary sacrifice to offset NI...

17 Mar 2025

Government to ease DB pension surplus release restrictions

28 Jan 2025

Job hoppers have ÂŁ16k more in pension savings...

21 Nov 2024

Qualified support for Reeves after Mansion House speech

15 Nov 2024

Rachel Reeves announces pension megafunds

14 Nov 2024

Budget 2024: encouraging growth does not come cheaply

29 Oct 2024

  • 2025 Employee Communications Report PROMOTED | HR and leadership...Read more
  • The Majority of Employees Have Their Eyes on Their Next Move PROMOTED | A staggering 65%...Read more
  • Prioritising performance management: Strategies for success (webinar) WEBINAR | In today’s fast-paced...Read more
  • Self-Leadership: The Key to Successful Organisations PROMOTED | Eletive is helping businesses...Read more
  • Retaining Female Talent: Four Ways to Reduce Workplace Drop Out PROMOTED | International Women’s Day...Read more

Personnel Today Jobs
 

Search Jobs

PERSONNEL TODAY

About us
Contact us
Browse all HR topics
Email newsletters
Content feeds
Cookies policy
Privacy policy
Terms and conditions

JOBS

Personnel Today Jobs
Post a job
Why advertise with us?

EVENTS & PRODUCTS

The Personnel Today Awards
The RAD Awards
Employee Benefits
Forum for Expatriate Management
OHW+
Whatmedia

ADVERTISING & PR

Advertising opportunities
Features list 2025

  • Facebook
  • Twitter
  • Instagram
  • Linkedin


© 2011 - 2025 DVV Media International Ltd

Personnel Today
  • Home
    • All PT content
  • Email sign-up
  • Topics
    • HR Practice
    • Employee relations
    • Learning & training
    • Pay & benefits
    • Wellbeing
    • Recruitment & retention
    • HR strategy
    • HR Tech
    • The HR profession
    • Global
    • All HR topics
  • Legal
    • Case law
    • Commentary
    • Flexible working
    • Legal timetable
    • Maternity & paternity
    • Shared parental leave
    • Redundancy
    • TUPE
    • Disciplinary and grievances
    • Employer’s guides
  • AWARDS
    • Personnel Today Awards
    • The RAD Awards
  • Jobs
    • Find a job
    • Jobs by email
    • Careers advice
    • Post a job
  • Brightmine
    • Learn more
    • Products
    • Free trial
    • Request a quote
  • Webinars
  • Advertise
  • OHW+