Pensions given vital support under Coronavirus Job Retention Scheme
27 March 2020
The Pensions and Lifetime Savings Association (PLSA) welcomes the vital support the Government has provided employers to enable them to continue paying pension contributions to furloughed workers under the Coronavirus Job Retention Scheme.
Grants paid to employers under the scheme are intended to support business and their employees by covering up to 80% of the costs of employment up to an overall cap of £2,805 per employee. That includes wages, plus employer’s National Insurance Contributions and the minimum employer pension contribution of 3% of qualifying wages required under automatic enrolment.
The continuation of pension payments underscores that AE contributions are an essential part of the employment package and will serve to protect the future income of those impacted financially by the coronavirus. As a whole, the scheme has a supportive effect on the sustainability of pensions, by protecting jobs and livelihoods.
In its statements, the Government has also made it clear that for now, contrary to some rumours in the media, it is not planning to allow employers to cease automatic enrolment contributions in response to the economic impact of the Coronavirus.”
Lizzy Holliday, Head of DC, Master Trusts and Lifetime Savings at the PLSA, said: “Wage subsidies to assist with the costs of employment are the best way to support businesses and employees, without negatively impacting on individuals’ financial future when we have come through this crisis.
“Under exceptionally challenging circumstances, savers can be reassured that employers are being supported to continue to contribute to their pension and that pension schemes across the UK are putting in measures focused on supporting savers and paying pensions during this difficult time.”
PENSION SCHEMES REMAIN CONFIDENT
Pension schemes remain confident in their ability to continue to deliver for their members during the coronavirus outbreak. According to a survey of 100 representatives from pension schemes among the PLSA’s membership which closed on Wednesday, respondents were overwhelmingly confident of meeting payment obligations in the coming months with 84% reporting that they were “very confident” and the remainder (16%) reporting that they were “fairly confident”.
In light of Government guidelines on non-essential travel and working from home, nearly all respondents said their contingency plans would deal well with the situation (96% “very well” or “fairly well”).
Mark Smith, Senior PR Manager
020 7601 1726 | [email protected]k
Steven Kennedy, PR Manager
020 7601 1737 | 07713 073024 | [email protected]