On the go: The Pensions Regulator is demanding that four hundred pension schemes review their data urgently within six months as part of a crackdown on poor record-keeping, with tough sanctions for non-compliance.
Astonishingly, trustee boards of these schemes are believed to have failed to review their data in the last three years. The negligent schemes include defined contribution, defined benefit and public service schemes. One consultant said the figure could be closer to 700.
A total of 1,200 schemes are being contacted to remind them to carry out data reviews of both common and scheme-specific data every year.
Common data is used to identify scheme members, such as their names, dates of birth, national insurance numbers and addresses. Scheme-specific data is needed to meet a scheme’s legal obligations and to carry out its daily functions and may include such items as how members’ funds are invested, the levels of pension contributions and the value of individual members’ benefits.
Trustees who fail to report on what proportion of their members they hold accurate common and scheme-specific data for may receive an improvement notice about their inadequate internal controls from the TPR. Non-compliance with the notice carries a fine of up to £5,000 for an individual or up to £50,000 in any other case.
Improvement plans on horizon
David Fairs, TPR’s executive director of regulatory policy, analysis and advice, said:
“Accurate record-keeping is vital to good governance and administration – without it trustees cannot ensure that savers will get accurate information or receive the pensions they are entitled to.
“Without accurate records, schemes cannot process financial transactions promptly and accurately, communicate with their members, check employers are correctly paying contributions, have confidence in the accuracy of scheme valuations or assess whether savers are getting value for money.”
Accurate record-keeping will also be vital for the pensions dashboards. Trustees that discover that the data they hold is of poor quality will be expected to draw up improvement plans to rectify the problem.
In addition to record-keeping, TPR is also planning to write to more than 1,000 schemes this year about issues such as dividend payments to shareholders and the length of recovery plans.
Up to 700 non-compliant
One pensions consultancy, LCP, said its own sources put the number of non-compliant schemes closer to 700.
Alan Casey, a seniro consultant at the company, said: “It is great to see the Pension Regulator finally getting tough on poor record keeping. Trustees have, for too long, not prioritised administration or known scheme data problems.
“The strong message now being delivered by the Regulator to 700 schemes who have failed to meet even their basic data requirements will help focus minds on the vitally important task of ensuring pension scheme data is fit for purpose.
“With major projects on the horizon, such as GMP equalisation and the future Pensions dashboard, having the correct pension scheme data has never been more important.”
