What other options are there to reduce employment costs?

• Before any agreed reduction in wages, actual changes to earning patterns (loss of overtime, for example) may impact the pensionable salary as defined under the scheme rules, with knock-on effects to a number of benefit calculations, such as death in service benefits.
• Contractual changes to member salaries may adversely impact accrued benefits as the final salary figure may be reduced to a greater or lesser extent depending on the duration of furlough and the severity of any reductions in wage, and hence reductions may be difficult to agree with staff.
• Reducing employer contributions will be subject to a number of the same considerations applicable to a DC scheme listed above. There will also be a need to change the rules and interact with the trustees, although it may be possible to override the rules with a direct contractual agreement with members.
• Reducing employee contributions will also depend on the scheme rules, particularly as to whether there are any discretionary powers to suspend contributions, or pensionable service.
• The rules will need to be considered for any unexpected consequences of furlough: depending on the wording of the rules, furlough may or may not be considered a leave of absence and may or may not have the effect of terminating pensionable service. This could have far-reaching consequences.
• In particular, if the workforce’s pensionable service is inadvertently terminated as opposed to suspended in accordance with any relevant rule, this could trigger a statutory employer debt on an employer participating in a multi-employer scheme, if pensionable service continues for employees of other employers. This sort of issue is unlikely to be spotted until after the event, and therefore difficult to untangle. However, an employer should be able to take advantage of the “period of grace” provisions by notifying the trustees of its intention to re-admit employees to pensionable service within the next 12 months.
• Clearly the impact of the Coronavirus Job Retention Scheme on DB schemes is complex and legal advice should be sought before any changes are considered.

• Working with PFI providers to get contingency plans up to date

• If a PFI provider is struggling to achieve service delivery requirements due to Covid-19, then local arrangements should be put in place to:
  • maintain unitary charge payments
  • revise contract requirements/standards

moderating payment and performance regimes where appropriate.

• In any event, you may wish to review and adjust your requirements to reflect the current situation. It is possible that some requirements can be relaxed, whereas others need to be tightened. For example, there may be an increased need for cleaning and maintenance in certain areas of your PFI premises or the layout of the premises and/or room uses may have temporarily changed. With staff illness and shortage likely to be an issue, you may also wish to consider if the resource can be moved from one area to another to help maintain essential services.
• When putting local bespoke arrangements into place it is vital that:
  •  Contract requirements or performance standards are not relaxed to the point where health and safety are put at risk.
  • It is made clear that the arrangements are temporary and that matters will return to normal as soon as the Covid-19 emergency is over. Indeed the guidance note makes clear that if assets temporarily close they should be kept in such condition that they can be immediately up and running when this emergency is over. In such instances, likely a basic level of maintenance and security will therefore be required as a minimum.

This scheme is specifically aimed at creating jobs for 18-24 year olds who are on Universal Credit and considered most at risk of unemployment because of the economic downturn. The Government has announced that it will pay young people’s wages (equivalent to 100% the National Minimum Wage plus the associated National Insurance contributions and employer minimum automatic enrolment contributions) for up to 6 months, and that this will amount to a grant worth approximately £6,500 per young person.

The jobs that are created must provide a minimum of 25 hours per week and be paid at a minimum of the National Minimum Wage The Chancellor announced that will be no cap on the number of jobs that will be funded under the Kickstart scheme.

Interestingly, there is currently no ‘single’ technology to be used by the judiciary within the protocol. The court and parties must choose from a selection of possible IT platforms or audio/telephone hearing (further details available in the guidance e.g. Skype for Business, Microsoft Teams, Zoom etc.) The particular platform must be agreed at the outset of each case and then specified in the case management order. The guidance issued also sets out the basic principles which apply when conducting remote hearings.

Borrowers will not have to pay a guarantee fee. Lenders will pay a fee to access the scheme. The Government will make a Business Interruption Payment to cover the first 12 months of interest payments and any lender-levied fees, allowing smaller businesses to benefit from no upfront cost.

British Business Bank has indicated that following earlier discussions with the banking industry, some lenders indicated that they would not charge arrangement fees or early repayment charges to SMEs borrowing under the scheme. Each business should check the terms of the loans being made to ensure this is the case and what the interest rate and prepayment fees will be following the period in which the Government makes payment of these amounts.