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Pensions and the coronavirus – important issues for trustees and employers

Posted: 07/04/2020

The unprecedented and unforeseen threat posed by the coronavirus as well as the fast moving response of the Government in its bid to contain the spread of infection mean that trustees and employers face navigating a rapidly changing environment in their efforts to manage risks to their businesses, pension schemes and employees.

With this in mind, we set out below a preliminary list of important points for them to consider in these challenging times.


As the Pensions Regulator (TPR) recommends, we advise trustees to confirm business continuity plans with key service providers like scheme administrators. This could include, for instance, the measures the administrators have in place to cope with issues such as the requirement for employees to work remotely, the likely unpredictable absences of key team members and any general under resourcing of staffing levels.

For defined benefit scheme trustees, the impact on scheme funding must be considered. Trustees should seek advice on changes to the funding position of the scheme and the employer covenant, including discussing with scheme employers the impact of the coronavirus on their business and their contingency plans.

To promote the smooth working of the trustee board during this uncertain period and to allow trustees to get to grips with working remotely, we suggest that trustees:

  • review their general workload for the next few months and delay any matters which they reasonably can;
  • the flip side of this is to ensure that trustees prioritise important tasks such as:
    • continuing pensioner payroll;
    • considering and paying serious ill-health lump sums;
    • reviewing ill-health early retirement applications and putting any granted applications into payment; and
    • considering and paying out death and survivor benefits.
  • ensure that they all have, where possible, the necessary means to work remotely and the support they require to do so; and
  • understand the requirements for quorate decisions and any powers of delegation which may assist the conduct of their trustee business during this period. In particular, trustees may wish to delegate certain decision-making duties to a smaller number of their body, where the scheme rules allow: this should be assessed in connection with determining beneficiaries of survivors’ benefits, perhaps, or for ill-health retirements.

As regards communications with members, trustees may well decide to post exceptional statements on their schemes’ websites to address members’ general concerns or produce Q & A or FAQ style documents with a generic script covering essential areas. Trustees will likely wish to work with their administrators on this as well as ensuring that the administrators are well prepared to deal with members’ queries.


Employers should check that their pension providers and scheme trustees are taking appropriate action to ensure the smooth operation of pension schemes during this likely period of increased staff absences and other challenges to maintaining efficient work practices.

We recommend that employers review their HR processes for any changes which should be made to enable them to respond efficiently to an increase in requests for information on pensions, as well as in other areas.

For employers sponsoring defined benefit schemes, we recommend regular dialogue with scheme trustees to keep them informed of the likely impact of the coronavirus on their businesses and possible projections for short to medium term operations. Employers should inform trustees of any action which they are considering which may have an impact on the scheme, its funding or the covenant.

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Penningtons Manches Cooper LLP

Penningtons Manches Cooper LLP is a limited liability partnership registered in England and Wales with registered number OC311575 and is authorised and regulated by the Solicitors Regulation Authority under number 419867.

Penningtons Manches Cooper LLP