Exclusive: Schemes submitting late valuations down 15% over 2018, TPR reveals

The number of pension schemes which were late in reporting their triennial valuations was recorded at 169 in 2018, The Pensions Regulator has revealed.

The number is down 15 per cent on the 2017 figures, where 201 schemes were late, and marks a steady decline in the amount of schemes which were late in their valuation reporting over the past five years.

TPR figures show 230 schemes were late in 2016, compared to 274 in 2015 and 310 in 2014.

Generally, schemes have 15 months to submit their valuations and are required to do so every three years. If they miss this deadline, trustees are must submit a breach of law notification, outlining what steps they are taking to resolve the issue.

A TPR spokesperson commented on the figures: “The majority of late valuations are received within two months of the trustee submitting a breach of law notification.

“A breach of law notification confirms the reasons why the valuation deadline has been missed, and what steps the trustee is taking. We remain in contact with the trustee to understand their revised timetable.”

If trustees fail to meet the timetable, the regulator will implement a “step plan” through the issue of a warning notice, and eventually an improvement notice or a third party notice, of which failure to comply could result in a penalty.

Since May 2017, TPR said it issued 13 warning notices, followed by seven improvement notices and/or third party notices to employers.

Last July, TPR fined Rentokil Initial’s pension fund £25,000 earlier this year for failing to complete two valuations for its Initial Hospital Service Limited No.1 defined benefit scheme.

Since April 2017, TPR has taken the breach of valuation deadlines much more seriously. In its 2018 Corporate Plan, the regulator set itself a target to deal with 95 per cent of cases within 12 months.

It met the target over 2017/18 and will issue set to give an update on its actions in it 2019 Corporate Plan, set to be published in April.

Some in the industry have questioned the “antiquated” triennial cycle, calling for a more strategic, risk-based approach to be considered, particularly as many schemes near the end of their life span.

However, TPR has said that valuations must be a “key priority” for trustees, to ensure it can check the health of the scheme.

Last week, the regulator published its Annual Funding Statement, and said that it expects DB schemes to set a long-term funding target alongside and have an investment strategy in place to achieve it.

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