The Covid-19 emergency is now the worst peacetime crisis of the modern era. Apart from
the immediate risks of the pandemic, the social and economic disruption has been unprecedented.

With approximately nine million employees furloughed, this has led to extensive anxieties about family cashflows and concerns for the future.

Pension schemes have a vital role to play in providing effective messaging to members to discourage them from panicking and jumping into rash, short-term decisions that could have a detrimental impact on their long-term retirement planning.

With their regular income reduced, many furloughed employees may be tempted to reduce or cease pension contributions.

In many cases, this may be necessary, but it is vital that members are able to make an informed decision and are able to recognise the longer term implications of leaving a scheme.

Rather, it could be appropriate for schemes to amend rules to allow membership to be resumed as soon as lockdown ends, but members should balance the short-term gains of extra cash against the longer-term cost of reduced pension accrual.

A more serious threat is that some members may be targeted by pension scammers. The temptation of early access to pension savings may cause some to heed the siren voice of criminals during a period of serious economic instability.

For those that do, the consequences would be serious and irreversible.

During this period, effective scheme communications are crucially important.

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