Summary
The Pensions Regulator has issued a report detailing the key findings from its third record-keeping survey, conducted among a representative sample of trust and contract-based pension schemes. The main findings were:
- awareness of the regulator’s guidance has remained very high – in 94% of schemes the administrator was aware of the Regulator’s record-keeping guidance – andTrustees are engaged with the record keeping guidance;
- the proportion of schemes with processes to measure common data in place or planned has increased substantially from last year, as has administrator knowledge of their scheme’s common data score and the proportion of schemes with a score above 90%;
- knowledge of the conditional data score remains lower than for the common data score; however, the proportion of schemes with processes in place or planned to measure conditional data has increased, along with the proportion who know their score and have a score above 90%;
- smallerschemes tend to produce administration reports less frequently than larger schemes;
- theproportion of administrators attending trustee meetings on a regular basis has increased, although the frequency is lower for smaller schemes than for larger schemes;
- themajority of administrators say that, in the last 12 months, they have alerted the scheme trustees to a data problem;
- contract-based schemes and smaller trust-based schemes are more likely to have administrators who are unaware of the record-keeping guidance;
- defined benefit schemes are more likely to have no processes in place or planned to measure common, as are medium-sized schemes;
- 81% of schemes assess the quality of the service provided by their administrator at least annually;
- some trustee boards do not think they are solely accountable for the record keeping of the scheme.
Background
The Regulator issued guidance for trustees, in June 2010, regarding their record-keeping responsibilities. The goal was to ensure that schemes hold accurate data, recognizing that poor records can lead to errors in benefit calculations and additional cost when securing benefits with an insurer, for example.
The Regulator identified three types of data:
- common data,
- conditional data and
- numerical data
and set out requirements for schemes to measure, and where necessary improve, the quality of their data.
Common data are those that are relevant in all schemes, such as a member’s date of birth and national insurance number. Conditional data are those required to calculate a member’s entitlement under a scheme, for example his date of joining the scheme and his salary history. Numerical data are statistics to aid understanding of the results of a data audit.
The guidance requires schemes to have measured the quality of their data – and corrected any problems identified – by the end of 2012. Benchmark “success rates” suggested by the guidance in relation to common data are 100% for data created from June 2010 onwards and 95% for data created before that date. No benchmark is provided for conditional data, since these will vary from scheme to scheme.
The guidance may be found by clicking here and the full survey results here .
Comment
The results of the survey show that there has been widespread awareness of and compliance with the Regulator’s guidance. However, progress appears to have been slower among smaller schemes. This is understandable, since these schemes will tend to have tighter cost constraints and less frequent trustee meetings. The findings suggest also that smaller schemes may have less contact with their administrators.
Censeo offers a data audit service, to help you establish whether you comply with the Regulator’s guidance. Please do not hesitate to contact us if this is of interest.