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Businesses are looking to forgo millions in pension contributions while they weather the impact of the coronavirus crisis.

Figures obtained by the Financial Times suggest that deals with trustees could see payments into company pensions reduced by as much as £1bn over the period of the pandemic.

The paper took a snapshot of the likely defined benefit pension fallout by surveying professional services firms that support over half of the employers offering DB style arrangements in the UK.

More than one in 10 employers are looking to take up The Pension Regulator’s latest offer of flexibility on paying into schemes, the pension consultants polled by the paper say.

Other data from actuaries Mercer provided to the paper suggests that outright suspensions in payments to reduce deficits within pension schemes are more likely that employers simply cutting the amount they are paying in.

DB schemes in the UK are estimated to have combined liabilities of around £2trn.

TPR has acted swiftly in the wake of Covid-19 to give guidance to schemes. The emergency measures it has introduced allow DB schemes to suspend transfer value quotations and payments for three months, for example.

It will also be taking a softer line on the enforcement of auto-enrolment contribution failures.

Many companies have decided to cut dividends to shareholders to sure up their cashflow during the crisis. TPR has reiterated in recent years its message that dividends should not be paid at the expense of pension contributions to staff.

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