|In light of the continual spread of the coronavirus and resulting emergency measures taken by the UK Government, we thought it would be helpful to re-confirm the T&Cs of the valuable Group Risk/Protection insurances you provide to your employees.
We have also provided some commentary on the recent stock market falls (thereby effecting all Workplace Pension Schemes) to provide some reassurance to your staff members in these disconcerting times.
Accordingly, please see the following links:
Group risk insurers
GP Broker Coronavirus (PDF)
Specific/technical FAQs (Link)
LEGAL & GENERAL
EAP Bulletin (PDF)
Statement and FAQs (Link)
Workplace pension schemes (defined contribution)
Auto-enrolment (AE) Statutory Contributions
Due to these unprecedented times, we are awaiting clarification from The Pensions Regulator as to whether Employers can temporarily cease making required Statutory pension contributions to their ‘qualifying workplace pension schemes’ during this difficult period.
In conjunction with this, following the recently announced Government support for ‘furloughed’ workers, it has subsequently now clarified/confirmed that the Coronavirus job retention scheme will cover AE contributions.
As soon as we receive any update/clarity on this point we will be in touch. In the interim please see link below to the TPR website with their latest guidance:
Stock market falls (Default Funds – Workplace Pensions
Covid-19 is a global health crisis that has become a global financial crisis with stock markets falling by up to a third in the space of just a few weeks. Whilst it may never feel like it at such times, markets do eventually recover from these very sharp falls as they did in 1987, 2003 and in particular in 2008 which is still relatively fresh in our memories. We would always recommend that long-term investors remain invested in such challenging times and not ‘cash out’ at the bottom of bear markets and so miss out on the very large returns that are generated as stock markets recover and go on to new highs.
Group Personal Pension Schemes are ideally suited to long term investors and are constructed in such a way as to mitigate the damage caused by the market conditions we are currently facing. Contributions are monthly so are made throughout the working life of the scheme member, in both rising and falling markets, rather than in periodic lump sums at what in retrospect may prove to be poor timing. The schemes have what is called ‘life styling’ whereby from around a decade to retirement there is a gradual shift in the individual members’ investment from a higher risk/reward to an increasingly lower risk/reward portfolio. In this way, scheme members are shielded from the worst effects of a substantial stock market fall if they are in the years coming up to their retirement.
Finally, for ease of reference, we have also provided the link to the recent Government initiative to pay up to 80% of ‘furloughed’ workers’ wages which we trust you find equally helpful:
Will keep you posted with any further updates.
In the meantime, if you have any queries or if we can be of any further help, please do call/email/Zoom as you know we are all fully geared up for working from home.
Stay safe & healthy!