11% of employers seek UK pension contribution easements
A recent report stated that 11% of employers that are seeking easements on UK pension contributions have asked for a reduction, while 89% asked for a suspension.
The research showed 15% had requested a suspension of all contributions, 67% requested to suspend deficit reduction contributions (DRCs) only, and 15% asked to suspend both DRCs and expenses.
Trustees have agreed to 44% of the requests, with many requesting further information or legal advice before deciding, and just 7% rejecting the request completely.
However, this fell to a 20% acceptance rate when companies asked for greater than 3 months relief of payment.
The research found that a suspension of 3 months was the most common period of time requested, although requested durations ranged from 3 months to over a year.
It is also noted that only one client had offered a security as part of the discussion around reducing or suspending cash contributions.
While clients across all business sectors had been affected, requests among the retail sector had been the most common.
It is a positive step that trustees and companies are working together to mitigate the short term challenges of Covid-19. The focus for both trustees and companies is to ensuring members receive the full benefit promise over the lifetime of their retirement and support the company during this crisis.