The Pensions Regulator’s thematic review of record-keeping standards is expected to heap pressure on small trust-based schemes and insurers with large books of legacy business.
Last week, TPR confirmed it is scrutinising pension record keeping, focusing particularly on defined-contribution schemes.
The regulator plans to review around 250 schemes covering a range of structures including DC, defined-benefit, hybrid, contract and trust-based.
The schemes will be asked to demonstrate the actions taken to meet data standards. TPR will also request details on the processes and controls in place to maintain or improve those standards.
Schemes that are taken forward for further scrutiny will be provided with individual feedback reports and at the end of the review the regulator will publish a report summarising its overall findings.
The Pensions Regulator policy lead for DC, governance and administration Louise Hallard says: “We expect schemes to have taken significant steps to reach the targets we set, but our last research findings showed many still had some way to go.
“We will be approaching a sample of schemes. Selecting a specific scheme for review does not mean that we expect to find problems with its record-keeping. However, if during the course of the review we find breaches of pensions legislation, we may consider taking action through use of our powers.”
This follows warnings from the regulator that small schemes may not be suitable for automatic enrolment.
Aegon regulatory strategy manager Kate Smith says: “We recognised the significance of this when TPR first set out its requirements. It takes considerable effort to developing systems to verify data.
“Small non-insured trust-based schemes that do not have access to advice could struggle with this.”
AWD Chase de Vere head of communications Patrick Connolly says: “Record-keeping in the past has been very poor. I expect some of the large insurers with big back-books of legacy business will have struggled to get their record keeping up to the standard required by the regulator.” c