TPR orders 400 schemes to conduct data reviews

The Pensions Regulator (TPR) has ordered 400 schemes to conduct a data review within six months as part of a crackdown on poor record-keeping.

The schemes’ trustee boards are believed to have failed to review their data in the last three years.

Following the reviews, the trustee boards will be required to report what proportion of their members they hold accurate common and scheme-specific data for to TPR.

Those that fail to do so may face action, which could include an improvement notice about their inadequate internal controls.

Failure to comply with the notice carries a fine of up to £5,000 for an individual or up to £50,000 in any other case.

TPR says that schemes will find themselves operating at a disadvantage without accurate records.

Although TPR put the figure at 400, LCP said it its sources had estimated the number of schemes to be ordered to review their data to be 700.

LCP senior consultant, Alan Casey, commented: “It is great to see TPR 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."

Problems that can arise from poor record-keeping include a failure to process financial transactions promptly and accurately, unsatisfactory communication with members, and a risk that employers are not paying correct contributions.

In addition, schemes with poor data cannot have confidence in the accuracy of scheme valuations or assess whether savers are getting value for money.

“Requiring trustees to carry out reviews will force them to look closely at their data and administration and take appropriate action to bring their systems up to scratch,” said TPR executive director of regulatory policy, analysis and advice, David Fairs.

The 400 schemes that are being told to complete data reviews within six months include defined contribution, defined benefit and public service schemes.

Trustees that discover that the data they hold is of poor quality will be expected to draw up improvement plans to rectify the problem.

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