Pension scheme data and the need for trustees to comply
Back in October the Pensions Regulator was making it clear that it will ask schemes to submit information on data quality as part of the annual scheme return in notices issued to DB schemes in January 2018 and notices issued to DC schemes next summer.
Anthony Raymond, its acting executive director for regulatory policy has also stated that the Regulator is relabelling ‘conditional data’ as ‘scheme-specific data’ to remove some misunderstandings.
Since then the Pensions Regulator has written to defined benefit and hybrid (defined benefit and defined contribution sections under one scheme) schemes confirming the new requirements for those schemes for the 2017/18 return. Schemes are being asked to contact third parties to ensure they have the information they need to complete the return. The key change, as expected, is in relation to scheme data.
The trustees of these schemes are being asked to confirm when they last undertook a data review, and to report on both common and scheme-specific data scores. By providing this information, the Regulator will be able to see how well trustees are maintaining member records, and if any improvements need to be made.
No changes have been announced for the DC return yet, but notices for these are normally sent out in July to August. Trustees normally have about six weeks to complete the annual return.
A further and potentially more immediate pressure on scheme records is also being introduced by HMRC in relation to new anti-money laundering (AML) rules. The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations were made by the Government on 22 June and came into effect on 26 June 2017. There are a number of obligations on affected trustees including the duties to:
- Keep accurate and up-to-date records of all beneficial owners of the trust;
- Provide detailed accurate information to HMRC by 31 January 2018 (if the scheme pays certain taxes);
- Retain certain appropriate records until five years after a scheme has wound up; and
- Provide law enforcement bodies with certain information on request.
Failure to comply with key requirements is a criminal offence.
Despite the timing of these requirements HMRC are still discussing the new AML guidance with the industry. This guidance and the impact on pension schemes will be the topic of our next Technical Blog.