Supreme Court Ruling Limits Insurer and Employer Contraceptive Obligations (US)

Stacey GrundmanDoug Anderson and Meghna Rao recently published an article on the Supreme Court’s decision adopted under the Trump administration significantly cutting back the requirement that insurers and group health plans provide coverage for contraceptives without cost sharing under the Affordable Care Act (ACA) on our Employment Law Worldview blog. To read the full blog post online here.


Transfers of Personal Data Outside the EEA: Action Required for Pension Schemes

PadlockDoes your pensions administrator or any other service provider access your personal data from outside the EEA, such as in the US? If so, it is important to take action now to ensure continued compliance with your obligations as data controller. This could also apply to schemes with a sponsoring employer (or parent company) located outside the EEA in addition to schemes whose third party administrator hosts client personal data on servers situated outside the EEA.

As a reminder, the GDPR (General Data Protection Regulation) provides that pension trustees should only permit personal data to be transferred from the UK/EU to a recipient outside the European Economic Area (EEA) (either by the trustees directly or by a third party service provider) if there are appropriate safeguards in place, unless one of a limited number of derogations applies. The legal framework in the US is not considered to contain adequate protection for personal data and so additional measures have to be taken by trustees to protect personal data transferred to the US in addition to other non-EEA countries, except those who have been designated as having adequate data protection laws by the European Commission. For a US service provider those safeguards are typically either certification by the US company to the EU-US Privacy Shield Framework (Privacy Shield) or the Standard Contractual Clauses (SCCs), although some of the larger service providers may use Binding Corporate Rules (BCRs). Continue Reading

PPF to doff its compensation cap

On 22 June 2020, the High Court ruled in Hughes v Board of the Pension Protection Fund that certain restrictions applied to benefits paid from the Pension Protection Fund (PPF) are unlawful on age discrimination grounds. Continue Reading

COVID-19: Yet More Relief, and More Certainty, for EMI Option Holders

On Tuesday, 21 July 2020, the Government announced further good news for companies operating enterprise management incentive (EMI) share option schemes that will allow them to continue to grant new options to individuals who:

  • have been furloughed under the Coronavirus Job Retention Scheme (CJRS), or
  • have taken unpaid leave, or
  • have had their working hours reduced

as a result of COVID-19.

EMI option holders are normally required to commit at least 25 hours a week (or, if less, 75% of their total working time) to the employer company. That can either be difficult or impossible where someone has been furloughed or had their hours reduced. The COVID-19 relaxation covers new options granted between 19 March 2020 and 5 April 2021 and will be welcomed by employers who want to grant options to staff who have been affected by the pandemic.

The period can be extended to 5 April 2022 should this be considered necessary or expedient “if the COVID-19 pandemic has not ended by April 2021” (which suggests it may not all be over by Christmas).

This new concession builds on the previous announcement that “if an employee with share options granted before [19 March 2020] would otherwise have met the scheme requirements but did not do so for reasons connected to the coronavirus pandemic, the time which they would have spent on the business of the company will count towards their working time” (see our previous blog post). That was a time-limited exception for existing participants in EMI schemes to ensure they did not need to exercise options earlier than planned.

One word urging continuing caution – there is still no clarity on the necessity for this (extended) concession to be approved by the European Commission for State aid purposes. Considering similar incentives have been adopted across Europe as part of the fiscal response to the pandemic it seems unlikely to be a problem… but affected employees and employers should watch this space for further developments.

Lost in the post: solving the case of the missing member!

Red Post Box

TPO has ruled that a pension scheme was liable to pay a full deferred pension to a claimant, despite the scheme having no record of his benefits other than a guaranteed minimum pension (GMP). This determination shows the significant weight that TPO places on HMRC’s GMP records and the inferences that can be made from those records. Continue Reading

COVID-19: Expenses of Working from Home – The Tax Rules

Working from home

The coronavirus (COVID-19) ‘lock-down’ has necessitated large swathes of the working population to perform their duties from home. As a result, working-from-home has become the ‘new normal’ for many employees in recent months.

Employers will be considering how best to assist their employees to work most efficiently and effectively from home while the lock-down endures. In doing so, keeping in mind the tax implications of their actions will be beneficial.

Continue Reading

The Geometry and Trigonometry of the Corporate Insolvency and Governance Act – What Is the Final Pensions Angle?

Geometric Image

If you are going round in circles trying to figure out the final shape of the new insolvency legislation, read this blog which takes a look at the impact the final amendments made to the legislation will have in the pensions sphere.

The Corporate Insolvency and Governance Act 2020 (the Act) received Royal Assent on 25 June 2020, with most provisions coming into force on 26 June 2020. In earlier blogs we covered the pensions angles of the new moratorium provisions and restructuring process that were proposed as part of the Bill, while our restructuring colleagues blogged more generally on the provisions of the Bill.

In our blogs we noted that the legislation, as originally drafted, resulted in some interesting tangents for pension schemes. Fortunately, some of the most detrimental proposals were modified at the final stage, reducing the degree of impact on pension schemes and introducing additional rights for The Pensions Regulator (TPR) and the Pension Protection Fund (PPF).

Critically, it remains the case that neither a moratorium nor a restructuring plan will be an “insolvency event” for the purposes of triggering the section 75 debt regime or a PPF assessment period. Continue Reading

COVID-19: A New Relief for EMI Option Holders

paper fortune teller

Late on Friday, 26 June 2020, with little fanfare, the Chancellor of the Exchequer tabled a new clause for inclusion in the Finance Bill 2020 (FB 2020) during its Report stage in the House of Commons. It addresses a key concern around furloughed employees who hold enterprise management incentive (EMI) options (as discussed previously on this blog), and confirms that EMI optionholders will not lose the beneficial tax status of their options as a result of being furloughed or working reduced hours because of coronavirus (COVID-19).

The new clause is very welcome as many EMI optionholders and their employers have been waiting anxiously for the government to confirm its position in this area. EMI options are widely used – according to HMRC figures, outlined in the Tax Information and Impact Note (TIIN) accompanying the new clause, in 2018-19 alone, more than 34,000 individuals were granted EMI options and approximately 12,000 companies were operating EMI schemes. However, there is a potential sting in the tail lingering as the impact of the concession on the state aid approval for the EMI scheme is not yet clear – unfortunately it is not quite time to breathe a total sigh of relief as a result.

Continue Reading

Flexibility Act Makes Key Change to CARES Act Payroll Tax Deferral Incentive and Other Key Changes

Following up on our prior post (here), regarding the Paycheck Protection Program loans (“PPP Loans”), President Trump signed the Paycheck Protection Program Flexibility Act of 2020 into law (the “Flexibility Act”) on June 5, 2020. The Flexibility Act relaxes and modifies certain requirements to obtain PPP Loan forgiveness. Specifically, the Flexibility Act makes five main changes:

Payroll Tax Deferral. The CARES Act allows employers to defer the employer’s portion of social security tax deposits that are due between March 27, 2020 and December 31, 2020. However, the CARES Act originally specified that this deferral option ends when an employer obtains PPP Loan forgiveness. The Flexibility Act modified the CARES Act to provide employers the option to continue deferring these taxes, regardless of whether the employer individual obtains PPP Loan forgiveness. This modification also applies to self-employed individual who are eligible to defer their self-employment taxes.

Extended Forgiveness Period. Under the CARES Act and guidance issued thereunder, only expenditures made during the eight-week period beginning on the date that the PPP Loan proceeds were dispersed are eligible for forgiveness. The Flexibility Act modified the 8-week timeframe, providing that expenditures made up to 24 weeks after dispersal are eligible for forgiveness.

PPP Loan Term. Under the CARES Act, the non-forgiven portion of a PPP loan had a two-year term. The Flexibility Act provides that PPP Loan terms shall now be five years, instead of two. Notwithstanding, PPP Loans made prior to June 5, 2020 will still have a two-year term, unless the borrower and lender mutually agree to extend the term. In addition, the Flexibility Act now provides that interest on PPP Loans shall be deferred until the amount of loan forgiveness is determined. Continue Reading

The Geometry and Trigonometry of the Corporate Insolvency and Governance Bill – What’s the Next Pensions Angle?

Geometric ImagePart Two

Yesterday, we looked at the proposed new moratorium process and the implications for pension schemes. Today we consider the new restructuring plan process.


The Corporate Insolvency and Governance Bill (the Bill) is passing through parliament at the moment. Some of the measures included in the Bill are in response to the current pandemic and will provide temporary easements for company directors from an acute economic downturn. Other measures have been under consideration for a while, and will be permanent. Continue Reading