The Pensions Regulator (TPR) must “strike a balance between getting pension scheme deficits tackled swiftly and not pushing so hard as to jeopardise the long-term future of the employer”, according to Lane Clark & Peacock (LCP) senior partner Bob Scott.
This comes as speculation grows over whether planned deficit recovery contributions into company pensions may be rescheduled as companies and pension funds weigh up the options amid the disruption caused by the coronavirus outbreak.
LCP revealed the regulator is beginning to have conversations with schemes as to whether this will be allowed and if so, in what circumstances it will be allowed.
While the pension fund is legally separate and, even if a company has temporary cash flow problems, pensions will continue to be paid, Scott revealed this may cause concern among members about whether their pensions are safe.
He said: "Pension scheme members can be assured that employers cannot simply walk away from pension promises when times are tough, and in the vast majority of cases there is no sign of any interruption to payment of current pensions."
He added: "It may be that firms facing particular cash flow challenges in these extraordinary times will be looking for some delay in making planned contributions to their pension scheme.
"But trustees and regulators will seek to ensure that firms explore other avenues to help with cash flow, including reviewing dividend levels and executive bonus payments as well as taking up government offers of help."
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