The vast majority of pension schemes say that Covid-19 is not having a detrimental effect on them running their schemes and helping savers achieve a better income in retirement, but have warned against the ending of regulatory easements too soon, a PLSA survey can reveal.
In the survey, the PLSA heard that over four fifths of pension schemes (81 per cent) believe Covid-19 is having only little or no impact on the day-to-day running of their scheme; a figure that is up from 67 per cent in April and 42 per cent in March. Furthermore, nine out of ten schemes (91 per cent) say they are currently operating all business processes smoothly to suit the current environment.
Impressively, all (100 per cent) Master Trusts and LGPS members surveyed said that their contingency plans are dealing with Covid-19 either very well or fairly well.
Since the start of restrictions in the UK due to Covid-19 back in March, most schemes (85 per cent) have reported that they have not seen an increase in member queries. In fact, under one in ten (8 per cent) have said that they have seen a substantial increase since the start of the crisis, while the same proportion have seen a slight decrease. Amongst those who have seen an increase in queries, most say that this has been driven by new retirements while a smaller number report queries around changes in employment or transfers out.
According to the survey, three in eight respondents (37 per cent) say that they have not seen any changes in member behaviour, while around a quarter (27 per cent) have reported that they have seen an increase in individuals accessing their website.
With 2020 drawing to a close, pension schemes are looking to the future with most being optimistic about continuing to cope with the fallout of this year’s pandemic. Some 63 per cent of Master Trust and LGPS members surveyed said that they do not have concerns about coping with the current situation for the whole of 2021 while a further quarter (25 per cent) said they were confident that they could cope for between more six months and just under a year. Only 12 per cent reported they would struggle to cope with the first six months of the new year.
Whilst pension schemes are being optimistic about the future, they also cautioned pragmatism needs to remain at the forefront of the Pension Regulator’s (TPR) thoughts with three-fifths (59 per cent) supporting the call for an extension of regulatory easements and flexibilities beyond early 2021.
Nigel Peaple, Director of Policy & Research, PLSA, says: “The pension industry has proven to be extremely robust in dealing with the massive disruption and unpredictability of Covid-19 and it’s pleasing to see so many of our members coping well and looking optimistically towards 2021.
“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.”