As well as paying tax, employers often pay substantial amounts in pension contributions. Leniency is also being shown with regard to these contributions in light of the coronavirus crisis. This is evident from a joint press release the Labour Foundation, the umbrella organisations representing pension providers, the Pension Federation and the Association of Insurers.
Coulance
The pensions sector also wishes to play its part in supporting business owners who are facing payment difficulties as a result of the coronavirus crisis. However, the issues vary from sector to sector and/or from employer to employer. A tailored approach will therefore be required.
This bespoke service is provided on the basis of the following solution approaches:
- pension providers are agreeing payment arrangements with individual employers who are facing acute financial difficulties;
- the payment deadlines for pension contributions will be extended, within the limits permitted by law;
- Pension providers are adopting a less strict debt recovery policy (in the form of postponing the involvement of debt collection agencies and the imposition of administrative fines).
The legal options for extending payment deadlines are limited. The Association, the Pension Federation and DNB are discussing this with the Ministry of Social Affairs and Employment.
How do I apply?
Employers facing immediate payment difficulties are advised to consult their pension provider’s website and, if necessary, contact their pension fund.
Emergency measure to bridge the gap whilst retaining employment
Those still to be carried out Emergency bridging measure to safeguard jobs (NOW) is also expected to include a contribution towards the pension contributions payable by the employer. The authors of the press release are urging the Government to ensure that both the employee’s and the employer’s pension contributions are adequately taken into account under the NOW scheme.
Employers would be well advised to take into account in their liquidity planning that part of the funds received under the NOW scheme will need to be used in the short term to pay pension contributions.