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Coronavirus impact: Support for employers and your workers

We are here to support you

Many people in the UK face uncertainty as the Coronavirus situation develops. We want to reassure you that we’re taking all necessary steps to ensure that the services we - and our partners - deliver remain available and operate without interruption.

We have the technology in place to enable our staff to work remotely and continue to support you. All the ways you can contact us remain open and fully operational. Our systems have not been altered and will continue to work in the same way.

What impact does coronavirus have on my ongoing contributions?

With the global impact of coronavirus dominating daily news, some of you and your workers may also be asking what this means for pension savings. We recognise this is a difficult time and we’ll be updating this page regularly.

Employers’ duties remain unchanged, so please where possible continue to follow your normal processes and pay contributions when they are due.

The government has recently announced a range of measures aimed at helping businesses continue to keep employees on their workforce and payroll in these difficult times.

The government has confirmed that as part of the Coronavirus Job Retention Scheme the grants available to employers are intended to support business and their employees by covering up to 80% of the costs of employment (80% of furloughed employees’ usual monthly wage costs, up to £2,500 a month, plus the associated Employer National Insurance contributions and minimum automatic enrolment employer pension contributions on that wage).

For more information from the government please see Check if you can claim for your employees’ wages through the Coronavirus Job Retention Scheme.

If I use the government grants to pay furloughed workers, do I still need to deduct pension contributions?

The Pensions Regulator has advised that the employers duty to pay pension contributions has not changed. Contributions will be based on what you pay workers and employers must meet the statutory minimum pension contributions. The government’s arrangements for paying employers in respect of furloughed workers will include the employer’s pension contributions.

When calculating the pension contribution due for a furloughed worker who has agreed a salary sacrifice arrangement for pension contributions, any contractual obligations you have entered into and the obligation in the pension scheme rules continue to apply as normal. For more information please see DC pension contributions: Covid-19 technical guidance for large employers.

I haven’t got enough money to pay contributions, what should I do?

We know this is a challenging time for many employers and we recognise the strain this is creating. 

You should still load the contribution amounts to the Nest system. Once you have done that click ‘Save changes’ so the details are there when you are ready to pay which you should do as soon as you are able to. Only click the ‘Submit schedule’ button on screen when you are ready to pay the schedule. If you are unable to pay at present, this will enable you to pay the schedules in future as and when you are able using your normal process to bring payments up to date.

The government has recently announced a range of measures aimed at helping businesses continue to keep employees on their workforce and payroll in these difficult times.

You can refer to the following guidance from the government and TPR.

Claim for your employee’s wages through the Coronavirus Job Retention Scheme

Covid-19: an update for trustees, employers and administrators

Will I be reported to The Pensions Regulator if I don’t pay pension contributions?

Yes, we’re still required to report employers for failed payments. However, the Regulator also understands these are exceptionally challenging times and for this exceptional period require us to report employers for late payment when they are over 150 days late in paying, rather than the previous 90 days. This gives you longer to bring your payments up to date before being formally reported to the Regulator.

The Regulator has published the following statement: “We know this is a challenging time for everyone and we recognise the strain this is putting on employers. We will take a proportionate and risk-based approach towards the enforcement of decisions, in light of these challenging times, with the aim of helping to get employers back on track and supporting both employers and savers.”

Can workers suspend their payments for a few months if they want to?

If workers ask to suspend or cease contributions they should be processed as you would normally do for a leaver/member ceasing contributions. When they rejoin, either voluntarily or at the 3-year re-enrolment date they should be added in as you would for any other new member. They will then receive the relevant opt-out rights. 

This may seem like a lot of work for a worker who only wants to suspend contributions for a few months, but it is the only way to do this within the regulations. 

Can I pause employer pension contributions? 

No. If you are paying workers, you must make employer pension contributions and deduct employee pension contributions based upon the amount of pay they receive. 

Due to business changes some workers are no longer earning enough to qualify for a pension contribution. What should I do?

If a worker’s earnings fall below the lower level of qualifying earnings (£6240 for the 2020/2021 tax year) and your definition of pensionable earnings is qualifying earnings, then when updating contributions on Nest the member should be marked as ‘insufficient earnings’.

I have stopped paying some workers, what do I need to do?

For those workers you have stopped paying for, you should mark them as you would normally do for a leaver/member ceasing contributions on a contribution schedule.

When you start to pay them in the future and assuming they are eligible to rejoin, you should enroll them into the Nest system as you would do for any other new member.

You may find the following links useful: 

How do I let Nest know if a worker wants to stop making contributions?

How do I use a CSV file to let you know a member has left employment?

How do I let you know a member has left employment using my online account?

I am suspending my business activities. What do I need to do with my workers’ pensions?

If you are no longer paying workers, you should mark all of your Nest members as you would normally do for a leaver/member ceasing contributions. You should then check all of your unpaid contribution schedules showing on the Nest system to make sure that they are up to date. Any outstanding schedules will trigger late payment processes.

Some workers have asked to stop pension contributions, can I tell all my workers about this option?

You should not advise or encourage workers to opt out of your workplace pension scheme. This could be considered an inducement and would be a breach of your legal duties. We’re obliged to monitor this and report any such incidents to the Pensions Regulator.

Is the government going to reduce or suspend employer and employee pension contributions for automatic enrolment?

No. The government anticipates that employer and worker contributions will continue to help workers save for retirement.

Should I cancel my Direct Debit?

No. Please keep your Direct Debit active – there’s no need to cancel it. As per normal processes, we will only collect payments from your Direct Debit as you instruct us to do so, by following the normal contribution schedule process.

A worker has passed away, what do I need to do?

Please see What do I need to do if a member of my organisation has died?

What additional action should I consider?

You may want to review the number of delegates on your Nest account to ensure you have enough cover in case of illness. Please see How do I add an individual delegate once I’ve set up with Nest?

Consider checking that your primary contact details are up to date in case access is required in an emergency. For more information please see How do I change the primary contact?

Getting in touch with us

If you require assistance, please contact us through our normal channels, including by accessing our help centre.

We’ve provided links below to some of the most common areas accessed by employers:

How do I let you know a member has left employment using my online account?

Where do I go to make contributions?

Overdue contribution schedules

How do I let Nest know if a worker wants to stop making contributions?

How do I use a CSV file to let you know a member has left employment?

How do I tell Nest that a member isn’t due to make full contributions for this pay period by entering information on the website?

These are unprecedented times and our teams are here to support you. We’ll work to ensure this page remains up to date and contains the latest information.

Pension Scams and online security

Scammers are preying on fears related to coronavirus. Protect yourself and your business from phishing scams. Remember that emails from Nest come from an email address ending in @nestpensions.org.uk or occasionally from @videosmart.com, a trusted partner. Any other address is likely to be fraudulent. Find out more about Pension scams and online security.

Below are some answers to questions you and your workers may have about Nest Investments:

Video: Update from Nest’s CIO, Mark Fawcett

How have our investments performed in recent weeks?

Our main funds have fallen but by considerably less than the main UK and international stock markets because we’ve carefully designed our long term strategy to help smooth out some of the sharper ups and downs in markets.

Were we prepared for this and if so how?

While the coronavirus pandemic is entirely unprecedented, we’ve built our investment approach on the understanding that markets go through periods of difficulty and uncertainty. We’ve prepared for difficult markets by diversifying our default funds so they are not overly reliant on any one asset class. We’re in a good position to be able to buy shares while markets are down and therefore help our members benefit when markets begin recovering.

Do we intend to change our investment approach and if so how?

We’re keeping a close eye on developments, which are clearly very fast moving. Our approach is long term and strategic, so any changes we make will be through that lens. We’ve prepared for situations like this by diversifying our default funds, so they are not overly reliant on any one asset class. We’re in a good position to be able to buy shares while markets are down and therefore help our members benefit when markets begin recovering.

Has diversification worked?

Current indications are showing that diversification is working. Stock markets like the UK’s main FTSE100 have fallen dramatically. Our main funds, which are well diversified, have fallen by considerably less, particularly in our Foundation Phase, which is designed to smooth out this type of market volatility for younger members, and in our funds for members who are closer to retirement.

What should I tell my workers? Should they be changing investment funds?

We can’t give financial advice but in these types of scenarios, the most sensible thing to do can often be to keep focused on the long-term goal and wait it out. Your workers might want to discuss their options with a financial adviser or The Pensions Advisory Service. They can find more information on our Guidance and advice webpage.

If you have questions from your workers about the impact of coronavirus on their investments, please guide them to How will my investments with Nest be affected by coronavirus?

 

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