Can employees reduce their pension contributions?
- Remember that employees will also be making contributions on any reduced wage under the Coronavirus Job Retention Scheme. The amount contributed may be less, but the contribution rate will be the same, unless the following applies.
- Employees may reduce their DC employee contributions if their scheme rules allow them to do so, but no further than the statutory minimum if the scheme qualifies as the employer’s auto-enrolment vehicle.
- Employees might choose to opt-out or cease active membership of their scheme, which might cause a spike in administration at a time when administrators are likely to be understaffed. It is important that employers remember they must not do anything to encourage or induce employees from leaving an auto-enrolment vehicle as this may constitute an offence.
- Employees who leave their scheme in this way will have to be re-enrolled in due course as and when required by law.
- For DB schemes, specific considerations apply (see the last section, below).
Related FAQs
The NHS Test and Trace service is operated by the NHS in England to track and help prevent the spread of COVID-19. Where an individual displays symptoms of coronavirus they can be tested to determine whether or not they have the disease. Those with the disease will then be contacted by NHS contact tracers and asked who they have come into close contract with.
Close contact is defined as:
- Face to face (within 1 metre)
- Spent more than 15 minutes within 2 metres of another person
- Travelled in a car or on a plane with another person
The contact tracer will then contact those people with whom the individual has come into close contact and tell them to self-isolate for 14 days.
In the event that the contractor is displaying one or more of the above signs, then it is worth considering the following actions to protect the employer’s position as far as possible:
- Closely monitor the financial and on-site performance of the contractor in order to assess the likelihood and timing of potential insolvency
- Ensure all bonds, guarantees and collateral warranties have been obtained under the building contract, and if not take steps to obtain them immediately
- Consider the terms of any guarantees to ensure that the guarantor’s obligations are not inadvertently discharged
- Bonds may require adjudication to have been commenced (or even completed) prior to insolvency so as not to be stayed pursuant to insolvency laws
- Carry out an audit of the on-site plant, equipment and materials, and evidence this (for example with photographs and written records)
- Ensure that copies of all relevant documentation have been obtained, for example drawings, specifications and anything required to comply with CDM requirements. If not, take steps to obtain these
- Review the payment position under the building contract, including whether any over payments have been made to the contractor which should be reclaimed, what retention is held or has been released, whether any payment notices may be necessary, and whether there are rights of set-off which should be exercised
- Check whether the involvement of any third party is required, for example funders, landlords, tenants or purchasers who may have rights in relation to the building contract and how it is administered
- Review the terms of the building contract relating to contractor insolvency – hopefully the parties will be fully aware of the building contract terms and have been administering it correctly to date, but if it has been hiding in a draw then now would be a good time to dust it off and ensure familiarity with the relevant provisions!
In general. there is often a stick or twist decision. If the employer chooses to financially support the contractor (for example by agreeing different payment arrangements), this may help to keep the contractor solvent and more likely to complete the project, but it also exposes the employer to greater risk if the approach is not successful. Conversely, withholding payments from the contractor may make insolvency a self-fulfilling prophecy. The precise advantages and disadvantages of the approach will be dependent on the specific circumstances of each case.
Small suppliers (defined by reference to certain financial indicators) are temporarily exempt from these new restrictions until 30th March 2021 in order to account for the difficulties to small suppliers during the Covid-19 pandemic.
There are also certain industries that are exempt from these restrictions (for example financial services). The Secretary of State may also create further exemptions framed by reference to kinds of company, supplier, contract, goods or services or in any other way.
It is the individual assessment by an organisation of its Covid-19 risk in its workplace that will be central. There may be common features across sites or areas of a site but every workplace will have a different risk profile depending on the service it offers and the workers who deliver those services. No one size fits all.
The context of managing Covid-19 risk is the need to tie in with UK government guidance and HSE advice – which despite being a lot more comprehensive than it was, is not a panacea and will continue to evolve. The difficulty we have with this in the context of the known increased risk to BAME employees from Covid-19 is that our understanding of the risk is, we would suggest, at a pretty early stage which makes it more difficult to address. However we know the increased risk exists and we owe our BAME workers a duty to manage that risk and keep them safe.
We also have a duty to consult employees. This is critical in managing this risk – ensuring BAME workers have a loud voice in the assessment process will be very important.
Where an individual has a particular characteristic, for instance they’re pregnant, they have physical or mental disabilities etc, the law requires us to look at that individual or, where it is a group, that group of individuals and assess the risk to them and take any reasonably practicable steps to control the risk to them.
Risk control hierarchy is key. In “normal” businesses we reduce our Covid-19 risk by keeping people away from the workplace – “avoid, eliminate and substitute” then changing work practices (e.g. social distancing measures) before we arrive at PPE. In a healthcare context, we arrive at PPE a lot more quickly.
We need to ensure our people are given sufficient information, instruction and training so they can do their jobs safely and we must consult workers and involve them in workplace safety – this is going to be critical in the context of Covid-19.
Due to the new guidance on social distancing and remote working, the Planning Inspectorate initially stated that site visits, hearings and inquiries would be cancelled. However, there is very much a push from the Secretary of State to keep the planning system moving notwithstanding the requirements to adapt to new ways of working. The Government now expects all hearings to be conducted virtually and where a virtual hearing is not possible, the expectation is that alternative arrangements will be put “speedily” in place and in accordance with social distancing requirements.
The Planning Inspectorate have been exploring ways of conducting hearings and inquiries remotely using technological means and conducted their first “digital” hearing on 11 May .
The Business and Planning Act 2020, which entered the statute books on 22 July 2020, includes provisions which allow more flexibility in relation to how appeals are determined including an ability for the Secretary of State to decide to adopt a procedure which is a combination of written representations, a hearing and/or an inquiry.
Site visits have re-commenced where it is safe to do so. The Inspectorate is looking at whether a site visit is necessary and has conducted a trial of “virtual site visits” where sites are assessed by means of photographs or video evidence.
The Planning Inspectorate have subsequently been scaling up conducting digital hearings, which also includes holding virtual local plan examination hearings.