Consultation Response

Apr 28, 2010

BBS has responded to the Pension Regulator's consultation document on good record keeping.

Background

The Pensions Regulator published good record keeping guidance in January 2009.  The guidance explained "the importance of maintaining good records and risk assessment, set out a methodology for the measurement and reporting of common and conditional data, and recommended improvement plans where gaps or inconsistencies exist".

The Regulator made it clear that it expected Trustees to voluntarily comply with the guidance, and indicated that it may make the guidance mandatory if voluntary compliance was poor.

During 2009, the Regulator investigated the extent to which the guidance was being followed and published a further consultation document in February 2010.  The main thrust of this further consultation reflects the Regulator's view that compliance has been disappointing and suggests proposals for introducing specific targets such that all schemes will have undertaken data cleansing by the end of 2012.

BBS's Response

In its consultation response, BBS has confirmed that it broadly supports the proposals to improve the quality of pension scheme data.  However, we have indicated that we feel it would be appropriate to give discretion to Trustees in deciding which data omissions are important for their particular scheme.  For instance:

• Where data is irrelevant for on-going administration, Trustees need not pursue matters.  For instance, where contributions are not refunded on death, it may be unnecessary to hold a detailed record of year-on-year contribution histories - Trustees should, therefore, be entitled to treat their data as being complete if some historic contribution data is unavailable.
• Where data is unavailable (e.g. when papers have been destroyed by previous administrators), Trustees should be able to take a view that such an omission can not be rectified and, therefore, that their data is complete.
• Where the cost of finding data is likely to be prohibitive, Trustees should be entitled to decide that it would not be in the members' interest as a whole to rectify the omission.

In addition, we noted that the Regulator is disappointed that few schemes have undertaken a review of their data.  We have, however, reminded the Regulator that in its original guidance it recommended that reviews should take place at a "convenient opportunity" such as at a triennial valuation and, therefore, many Trustees are likely to have agreed a timetable for a review, whilst not actually undertaking the review itself.

If you would like a copy of our full response, please contact Marc Davies our Administration Manager.

Undertaking a Review

BBS has developed a software solution that allows the majority of the Regulator's data checks (together with a number of additiona lchecks) to be undertaken in an automated and, therefore, cost-effective manner.  All of our clients are encouraged to timetable a review (and many have done so).

We would also be delighted to help any Pension Scheme Trustees whose current administrators are unable to offer such a cost-effective solution.

Again, please speak to Marc for further details.