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In June 2010, the Pensions Regulator (TPR) published updated guidance, designed to help those responsible for record-keeping and administration put in place good practices for measuring the presence and accuracy of member data. The guidance gives advice on assessing the risks of incomplete or inaccurate data and strengthens TPR’s earlier approach to record keeping. Broadly, it will take enforcement action (for example, issue an improvement notice) where the evidence it gathers indicates a breach of pensions legislation.
TPR introduces targets for the standards of data (100% accuracy for new data and 95% accuracy for legacy data - any data created before June 2010) and a deadline (December 2012) by which it hopes schemes will have addressed any problems.
TPR has designed a framework for measuring and assessing data, based on three core tests of “common”, “conditional” and “numerical” data.
Common data will apply to all members of all schemes and will include a member’s name and contact details, NI number, membership status etc... The absence of, or an error in, any element of common data could lead to difficulties in a member being traced, and a risk of uncertainty that a member’s benefits have been calculated correctly.
Conditional data is more detailed data which will depend on, among other things, the type of scheme, scheme design and a member’s status in the scheme. TPR considers that scheme providers, administrators and trustees are best placed to decide the exact constituents of this conditional data, based on an understanding of the requirements of their own scheme and administration system.
According to TPR, numerical information regarding membership records can help put the results of other measures into perspective. It enables consideration of whether the number of such records is broadly consistent with knowledge of the scheme. Examples of numerical information include: the number of benefit categories which give rise to a separate benefit structure; membership statistics (active, deferred, pensioners); the number of active and deferred members who have payment of AVCs recorded; and the number of members who have had a pension sharing order.
TPR’s guidance contains a list of the common data required for all schemes, as well as illustrative lists of conditional and numerical data.
Author: Katharine Swire