The current pandemic has temporarily disrupted some employers and employees’ ability to contribute towards retirement savings funds due to financial distress. The Financial Services Conduct Authority (FSCA) has issued a communication that retirement funds may make some rule variations to allow for provisional agreements between employer and employees to provide temporary relief from making payment of contributions to retirement funds, where there is proof that the employer is in financial distress.
In each of these situations, the priority is to assist people in making smart choices to lessen the impact on their lives and livelihoods and to achieve the best possible outcomes for all.
Whatever the situation, the key is to communicate: The employer needs to communicate directly with employees or via a union representative about what the situation is, and the employee needs to ask the right questions if they need more information. Be sure to read all the communication that might have been sent to you from your retirement fund. Speak to your HR department or employer about this or contact the principal officer of your retirement fund. Empower yourself today and minimise the impact of this pandemic.
This situation will eventually pass, and the ultimate goal is for your retirement funds to be as minimally affected as possible.
There are many options on the payment of retirement fund contributions during the current pandemic.
- Situations where the contributions can continue uninterrupted.
- Where pensionable salaries are reduced for employees who are working reduced hours and earn reduced salaries based on the hours worked.
- The suspension of contributions where employees are temporarily absent from work.
- The reduction or complete stopping of contributions for a specific time period only.
- The postponement of contributions for a specific time period.
- The termination of participation in the retirement fund contributions.