Regulator criticises 'patchy' administration levels

Bob Jackson, pensions administration and governance specialist at the regulator, insisted the watchdog did not plan to make the guidelines mandatory. However, he added that this position would be reviewed at the end of the year.

Recent proposals from the regulator demonstrated its intent to punish poor record-keeping with fines, trustee bans and a name-and-shame campaign.

“Market penetration of our guidance on administration has been patchy, and is heavily influenced by direct contact with us,” said Jackson.

“We hope to see a marked improvement before 2012.”

The regulator first issued its guidelines on record-keeping in January last year, setting out a list of common data (see box) that it suggested all schemes should look to maintain. These are in addition to conditional data, which is dependent on the scheme.

However, a study of 689 schemes in November – intended to discover how well the guidance had been adopted – revealed mixed results. While 47% of the surveyed schemes had more than 90% of the suggested common data present, 16% had less than 10%.

Pat Wynne, director at Xafinity Consulting, said it was important that schemes keep on top of their recordkeeping due to the import-ance of market timing in derisking.

“The risk of not having good data is that you will not be able to take advantage of good risk reduction deals when they become available,” he said.

It is claimed that poor data can impact the size of liabilities by as much as 5%, which has a significant bearing on the price of a buyout deal. In one £1bn buyout deal last year, market timing reduced the potential cost by £40m.

Wynne added: “You can only transact instantly if the data is already in place.”

The regulator’s proposals set targets of 100% for new common data to be present in schemes, and 95% for legacy common data.

Consultation on the proposals will be open until April 27. The consultation document can be found at tinyurl.com/tpr-admin.

Recommended data

Last year, the Pensions Regulator issued a list of 11 pieces of data that it suggested all schemes maintain about its members. These were:

• national Insurance number;
• surname;
• forename or initials;
• sex;
• date of birth;
• date on which pensionable service, policy and contributions began;
• date of expected retirement or scheme maturity;
• membership status;
• most recent status event;
• address;
• postcode.