Shining a spotlight on data quality
The Pensions Regulator confirms the items that schemes will be required to report in relation to the quality of scheme data.
The Pensions Regulator has published information on what items of information it will be collecting in relation to record-keeping for the 2017/18 scheme return. This move follows last year’s announcement that trustees of pension schemes would be required to report on record-keeping in their scheme returns as part of a further drive to improve standards and pave the way forward for new technology and initiatives such as the Pensions Dashboard.
The new information for scheme returns includes:
the date that the scheme last undertook a common and scheme-specific (‘conditional’) data review (with a check box to indicate if this was not completed in the last three years) , and
both common and scheme-specific (‘conditional’) data scores (again with a check box to indicate that scores are not available).
The Regulator has published a checklist for the new information being requested as part of the 2017/18 scheme return for trustees of defined benefit and hybrid scheme and further information on the Regulator’s expectations is set out within the Annex. The new scheme return questions can be seen in Section 8.3 of the Example Scheme Return Form. The changes to the DC Scheme Return have yet to be confirmed but it is expected that they will follow suit.
The data quality information in scheme returns will allow the Regulator to target its interventions more specifically at those schemes that seem to be failing in their duty. The Regulator says:
We won’t take enforcement action on the basis of scores alone, but if we have concerns that our standards are not being met we might engage with individual schemes. This may result in us taking action where trustees fail to demonstrate they are taking appropriate steps to improve their records.
The Regulator has already been in contact with trustees of defined benefit or hybrid schemes encouraging them to contact third parties, like their administrator or provider, to ensure that they have the information they need to hand to complete their scheme returns. The scheme return notices are yet to be issued but should follow in December 2017 or January 2018.
Good quality data underpins all aspects of successfully operating pension schemes and the regulatory pressure on this topic has undoubtedly increased as plans for the Pensions Dashboard take shape. Data is a key component of administration efficiency and accuracy, member engagement and liability management and as such should not be considered as a simple ‘tick-box’ exercise to satisfy the Regulator but as part of a long term strategy to improve the running of a pension scheme.
Schemes who have not undertaken a common or conditional data review in the last three years may wish to do so shortly to ensure that they are not subject to any regulatory scrutiny. The Regulator’s expectation is for annual data reviews, so those schemes who do not have a common or conditional data test scheduled for 2017/18 may wish to arrange this and add it to their business plans and risk registers.
Further details on how Capita can help trustees comply with their record keeping obligations can be found here.
If you wish to discuss record-keeping requirements, then please contact your usual Capita contact or alternatively you may e-mail the Business Development Manager for Capita’s Coredata™ Services: Christopher.Fletcher2@capita.co.uk
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