"Proportionate and risk based" is an expression used fairly regularly by the Pensions Regulator but never has it been more important than now. With employers striving to adapt to an economy in lockdown, dealing with the twists and turns of pensions auto-enrolment requirements and adapting those to the Coronavirus Job Retention Scheme (“CJRS”) can sometimes seem like a complication too far. Helpfully the Pensions Regulator has stated that it will take a proportionate and risk based approach to enforcement actions during this time of crisis.

Under the CJRS, the HMRC will meet the cost of statutory minimum employer pension contributions for furloughed employees. But many employers make pension contributions above the statutory minimum.  Ordinarily, for companies with more than 50 employees,  reducing employer pension contributions to the statutory minimum would require employers to consult with affected employees for at least 60 days. In today’s environment a 60 day consultation period is something of a luxury many employers simply cannot afford. 

Today (9 April 2020) the Pensions Regulator has issued further guidance to employers relating to pension contributions.  Though it cannot waive the statutory consultation requirements, it has stated that it will not take regulatory action in respect of a failure to consult for 60 days if employer pension contributions are reduced to the statutory minimum where:

·       the reduction in employer pension contributions only applies to employees who are currently furloughed

·       at the end of the furlough period, the employer pension contributions will return to the usual rate, and

·       the employer has informed the affected staff.  (Employers are encouraged to consult as far as possible with affected employees. )

This relaxation in regulatory requirements will apply until 30 June 2020 but the Regulator will review this date as matters progress.