UK regulator sets 2012 deadline for record-keeping improvements
UK - The Pensions Regulator (TPR) has set out specific targets for the standard of data and record keeping expected of pension schemes, along with a two-year deadline for funds to have made the necessary improvements.
In its revised record-keeping guidance, TPR noted that a review in 2009 had shown progress on data quality and member records was "limited" and therefore concluded "further action is required".
It stated: "We are introducing targets for the standards of data and a deadline (December 2012) by which we hope schemes will have addressed any problems."
For common data records - consisting of basic information about members - TPR has set a target of 100% for new data created after June 2010 and 95% for legacy data, to reflect potential inherited problems from previous trustees, managers or administrators. Targets for conditional data will be set by trustees, since the information required varies from scheme to scheme, and numerical information will be included in a report.
TPR noted that where the results of the reporting process against the targets "indicate further investigation or data improvement is needed, action plans should be developed to address gaps and weaknesses according to the risks involved, by the end of 2012. Clearly such plans will involve re-testing to demonstrate progress".
The regulator highlighted its continued focus on "educating and enabling" schemes to improve standards of record keeping, but it confirmed: "We now intend to supplement this by strengthening our regulatory approach. We will take enforcement action where the evidence we gather indicates a breach of pensions legislation."
It warned, "where record-keeping problems are so severe as to indicate a failure to maintain adequate internal controls, resulting in a failure to administer the scheme in accordance with the scheme rules and the broader requirements of the law, these schemes will be prime candidates for investigation".
TPR admitted it would be less likely to take action against breaches where trustees and providers were in the process of implementing plans to address the data problems. But it revealed progress in this area would remain under review, with a further update, including results of data audits of a sample of schemes, scheduled for 2011.
Bill Galvin, acting chief executive of TPR, said: "We are confident that, not withstanding the challenges in addressing these issues, this is the right way forward. Whilst there are encouraging signs of progress, we are yet to see the significant improvements we expect. We will continue to monitor how the industry responds and will report again in 2011."
The new guidance follows an earlier consultation by TPR on proposed targets, after research had shown only 19% of schemes had checked to ensure they held all the common data about members. (See earlier IPE article: TPR cracks down on poor pension admin)