Regulator publishes record-keeping and wind-up guidance

Targets for member record-keeping have today been published in guidance from The Pensions Regulator.< p/>  

The guidance follows a consultation earlier this year. In light of the wide support for the changes that were proposed, the regulator has not made significant modifications to these proposals.

The regulator expects all schemes to measure their member records and, where necessary, have plans in place for improvement. The final guidance sets out a strengthened approach that includes:

• recommending specific targets for standards of common data;
• using regulatory powers to investigate standards within schemes including sampling schemes for data audit;
• potential enforcement action where there is a breach of legislation;
• setting a deadline of December 2012 for the resolution of outstanding data issues; and
• enhancing the education material on its website.

Bill Galvin, acting chief executive, said: “The feedback we received during the consultation has been very constructive, and working with the industry has enhanced and clarified our approach. We are confident that, notwithstanding the challenges in addressing these issues, this is the right way forward.

“Whilst there are encouraging signs of progress, we are yet to see the significant improvements we expect. We will continue to monitor how the industry responds and will report again in 2011.”

Poor standards of member record-keeping can lead to additional costs in areas such as administration, claims from members, and wind-ups. Revised guidance on wind-ups was also published today.

More broadly, the original two year wind-up target set out in guidance of June 2008 expires on 30 June 2010. Progress has been positive, particularly with DC schemes, and the regulator’s view remains that the two-year target is reasonable. The regulator will be intensively scrutinising those schemes that have failed to meet the target.

The record-keeping (PDF) and wind-up (PDF) consultation responses and the final guidance on record-keeping and revised guidance on wind ups can be accessed on the regulator’s website: www.thepensionsregulator.gov.uk

1. The record-keeping proposals were developed from industry feedback on two consultation papers ‘Record-keeping: a consultation document’ (July 2008) and ‘Record-keeping: measuring member data’ (Feb 2010) which reviewed progress in the first year. The consultation received nearly 50 responses.
2. Common data is data that is used to uniquely identify a member, such as name, date of birth, National Insurance number, start date of pensionable service, and expected retirement/ maturity date.
3. Conditional data is additional, more detailed data that includes employing company, leaving date, lifestyle, DC transactions, and investment splits. It provides a view of the data required for the effective administration of the scheme and allows providers or trustees to measure changes in data over time.
4. Legal obligations to keep records about members and their benefits arise from many sources including trust law, primary and secondary legislation, tort, contract law and European law. The Pensions Regulator is not responsible for enforcing all these obligations. However, it does have the power to enforce the requirements of pensions legislation using its statutory powers. These powers include the use of Improvement Notices, Third party Notices, and the imposition of Civil Penalties.
5. Trustees are accountable for record-keeping in trust-based schemes and providers are accountable in contract-based schemes.
6. The publication of the final wind-up guidance and consultation report follows a 12-week consultation, launched on 02 February 2010. There were 13 responses from a cross-section of interested parties.
7. Changes to the trustee register have now also been published: Changes to our trustee register (PDF)
8. The Pensions Regulator is the regulator of work-based pension schemes in the UK, with objectives to protect members' benefits, promote good administration and reduce the risk of calls on the Pension Protection Fund. Our approach is risk-based focusing on education and enablement, with enforcement where appropriate. We have the ability to:

• Ben Lloyd 01273 627208
• Katherine Long 01273 811859
• Ruth Hallam 01273 627752  
• Out of hours 01273 648496
• www.thepensionsregulator.gov.uk

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