Tougher approach on poor record-keeping

Trustees and those responsible for administering workplace pensions will need to improve standards of record keeping. The Pensions Regulator published a consultation today setting out standards for member records and requiring schemes that fall short to take steps to improve their performance.

Following extensive research and engagement with pension providers and employers during 2009, the regulator has built on guidance published last year, which provided a framework for the clarification and assessment of member records.

Take-up of this guidance - which set out the common data schemes were required to hold - fell below the levels expected. Only 19% of schemes surveyed had checked that they had all the fundamental common data. Of these, some 53% appeared to be missing more than one item of this data.

The regulator will continue to 'educate and enable' schemes to improve their record keeping performance but is clear now that further measures are needed. Under these proposals, it will now be a requirement for all schemes to maintain high-quality standards of data.

The regulator proposes to set targets for the accuracy of the common data which schemes must hold. The regulator also proposes to review performance of schemes. Where schemes fail to have adequate plans in place to resolve data issues, the regulator will require them to improve.

Good record-keeping applies to all schemes, whether trust-based or contract-based. In respect of contact-based arrangements, the Pensions Regulator works closely with the Financial Services Authority to improve standards and take corrective action where necessary.

Executive director of strategic development Bill Galvin said:

"Accurate, complete data on members is a basic building block for almost everything that happens in a pension arrangement, and we will take a much firmer line going forward.

"Poor record-keeping can lead to significant additional costs for schemes - with the potential effect of reduced benefits for members.

"Automatic enrolment will bring millions of people into pension saving for the first time, increasing the volumes of member data held. This makes it all the more important that schemes put their records in order.

"The regulator will maintain its focus on supporting trustees to improve standards. But where credible plans are not put in place to address poor record keeping, we will require improvement."

Poor record-keeping can result in extra costs to a scheme in areas such as administration, error correction, claims from members, wind-ups or buy-outs.

As part of the 2012 pension reforms, obligations on record keeping form part of compliance regulations which have been laid before Parliament.

In the coming weeks, the regulator will also be publishing a bite-sized record-keeping e-learning module to complement the updated guidance. It will also be hosting a number of governance workshops, for trustees and the pensions industry, which will focus in part on record-keeping. More information will be announced shortly.

The consultation, which lasts 12 weeks, can be viewed on the regulator's website: http://www.thepensionsregulator.gov.uk/index.aspx

To view the updated guidance: http://www.thepensionsregulator.gov.uk/pdf/record-keeping-con-doc-2010.pdf

To view the full press release: http://www.thepensionsregulator.gov.uk/mediaCentre/pressReleases/pn10-03.aspx

Media relations
The Pensions Regulator
amediarelations@thepensionsregulator.gov.uk

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