Schemes confident on pandemic resilience

The bulk of schemes believe Covid-19 is having only little or no impact on the day-to-day running of their scheme, according to a survey by Pensions and Lifetime Savings Association (PLSA), but cautioned against lifting of regulatory easements too soon.

More than four-fifths of schemes said the pandemic was not having a detrimental effect on them running their schemes and helping savers achieve a better income in retirement, a figure up from 67% in April and 42% in March.

All LGPS members surveyed said that their contingency plans were dealing with Covid-19 either very well or fairly well.

Since the start of UK restrictions, 85% of schemes reported that they have not seen an increase in member queries. Among those who have seen an increase in queries, most said that it had been driven by new retirements, while a smaller number report queries around changes in employment or transfers out.

Almost two-thirds of LGPS members surveyed said that they did not have concerns about coping with the current situation for the whole of 2021, while a further quarter said they were confident that they could cope for between six months and just under a year.

However, schemes also cautioned that pragmatism needed to remain at the forefront of the Pension Regulator’s (TPR) thoughts, with three-fifths supporting the call for an extension of regulatory easements and flexibilities beyond early 2021.

Nigel Peaple, director of policy & research at the PLSA, said the pension industry had proved to be extremely robust in dealing with the massive disruption and unpredictability of Covid-19.

“Yet it is important that policymakers and regulators take into consideration the forthcoming difficult economic and investment environment, and make sure that the decisions they take next year support schemes in helping savers achieve a better income in retirement,” he added.