From next year, DB and DC schemes will need to report their record-keeping scores to the Pensions Regulator (TPR) via the scheme return. TPR will use these scores to target schemes that are failing in their duties, so it’s now more important than ever for schemes to get their house in order.
It is the trustees’ responsibility to ensure complete and accurate scheme data is maintained. While a stricter approach from TPR may be the only way to force some schemes to clean up their act, we would urge trustees to see the real benefits of maintaining accurate scheme records and data.
Ultimately, having good data helps to ensure the right benefits are paid out at the right time, thus reducing risk and costs. We frequently advise trustees who are considering de-risking options, scheme mergers, buy-outs or wind-up on the importance of ensuring that scheme records are accurate. At a basic level, member communications and consultations are difficult if accurate records are not kept, but poor data can also impact on actuarial assumptions being more conservative, leading to increased costs for the scheme.
If trustees have not already done so, they should engage with their administrators to carry out a review and, where necessary, put an action plan in place. TPR is looking to publish further details later in the year but there is already guidance available for trustees.