In order to deal with the financial consequences of the COVID-19 outbreak, Parliament has adopted temporary amendments to the rules for temporarily laid-off employees who belong to private pension schemes.
In general, employees who are laid off do not continue as members of private pension schemes. However, pension agreements can state that in such cases, employee membership will continue. The above changes will mainly affect employers that have not agreed to this.
Parliament has decided that employers may choose to allow laid-off employees to retain their membership with a pension scheme during the lay-off period. The individual employee must bear the cost of continuing insurance for the membership, while the business must continue to pay the administrative costs. This will entail temporary changes to:
- the Defined Contribution Pension Act;
- the Occupational Pension Act;
- the Enterprise Pension Act; and
- the Insurance Contracts Act.
The proposed changes will come into force once they have been addressed by the King in Council.
