The Regulator has published a consultation document, saying that it proposes to enforce new and higher standards for keeping member records. This consultation follows on from the Regulator’s good practice guidance published in January 2009. The Regulator believes that a high standard of record-keeping is not seen as a priority and has concluded that currently very few providers have comprehensive and accurate records. As its guidance seems to have only had a limited effect, and in anticipation of the automatic enrolment requirements being introduced in 2012, the Regulator believes it should adopt a tougher stance on this issue.
Under the proposals, the Regulator would introduce targets for record-keeping and would use its powers to investigate whether these targets were being met. If it found evidence of poor practices, and no plan was being implemented to address the problem, the Regulator says it would propose to take enforcement action to deal with the problem. The enforcement action would depend on the circumstances, but according to the consultation this could include serving improvement notices on trustees, or third party notices (telling administrators or employers to improve the services they provide to the trustees), fines, publicising the enforcement action it was taking and, in extreme cases, removing and replacing the scheme’s trustees.
The Regulator intends to monitor industry improvements throughout 2010 and will publish an update at the end of the year. Its aim is that by the end of 2012, record-keeping standards will be much higher and legacy data problems will have been addressed. In the meantime, trustees may wish to review their compliance with record-keeping requirements, with the aim of identifying areas of improvement before the Regulator introduces its enforcement-based approach