The London Borough of Barnet Superannuation Fund has introduced a range of new internal controls to improve its administration in response to sustained criticism of its service levels and intervention by the Pensions Regulator.
In a report published on October 25, TPR said its engagement with the management of the scheme’s administration process had led to “significant improvements”. It outlined how it worked with Barnet’s scheme manager to improve governance and administration standards.
As a result of the recent improvements, the regulator is not seeking any further action against the scheme.
Barnet has been in talks with the watchdog over improvements to its controls for some time. The report says that initial remedies led to further compliance issues being identified earlier in the year, requiring additional controls to be introduced.
It states: “In our ongoing engagement with the scheme manager, we uncovered a number of weak governance processes within the fund, which included a lack of oversight covering member data quality and the payment of contributions.”
The report also lays bare a catalogue of errors at the fund, including £1.7m of late contributions and a lack of clarity over its member data.
The fund’s administrative errors affected around 27,000 members. The scheme’s administration is currently outsourced to Capita.
Originally it was apparent there was insufficient oversight of the work being done by third-party service providers.
Mike Birch, TPR
40,000 lines of data corrected
The significant improvement witnessed in the steps being taken to administer Barnet include refinement of internal controls and the introduction of more detailed reports and mechanisms, put in place to challenge the information provided by the administrator.
The report also highlights how Barnet and Capita have since taken decisive steps to remedy the additional errors in a timely manner, without prompting from the regulator, as well as significant improvements in record-keeping standards.
Although the scheme manager was not able to fully cleanse all the data it expected to be able to by August 31 this year, with around 160 data lines outstanding as of August 22, it had demonstrated significant improvements in record-keeping standards with around 40,000 lines of data being corrected.
Mike Birch, TPR’s director of supervision, said: “Since we started engaging with the scheme manager we have seen a significant improvement in the administration of the fund.
“Originally it was apparent there was insufficient oversight of the work being done by third-party service providers. While pension schemes can delegate work to third parties, they remain responsible for their scheme.”
Dan Thomas, leader of Barnet Council, said: “We needed to get things right and it’s very encouraging the fund is now in a much better place.
“We are committed to our responsibilities as scheme manager, and will now do everything we can to continue to build on these improvements and provide a high-quality service to scheme members and employers.”
Regulatory spotlight following pension audit delays
The regulator met the scheme manager in June 2018 to set out its expectations for improving the running of the scheme, such as requiring the scheme to implement monthly monitoring of contributions and to provide accurate annual members’ benefit statements for 2018 and 2019.
This followed a warning notice issued in May, the first time TPR had issued an improvement notice to a public service scheme solely focused on internal control failures.
Earlier this month, TPR asked the trustee boards of 400 schemes to conduct a data review within six months. These schemes were believed to have not reviewed their data in the past three years.
