On the wave of "wide support" revealed by earlier consultations, The Pensions Regulator (TPR) this week updated some of its regulatory guidance from 2008.

Record Keeping

This guidance should form an essential tool within a scheme's internal control processes. It is relevant to those accountable for the quality of member data: typically trustees of trust-based schemes and managers of those which are contract-based.

This revised version comes in the wake of evidence that there has been limited take-up of the original (December 2008) guidance. TPR is thus making its view a little more explicit and, as in the consultation draft, has set targets for the standard of "common data" (ie that which all schemes require):

• all new data created after June 2010, should be 100% accurate;
• older "legacy data" should be 95% accurate.

Just as important is scheme-specific conditional data; the guidance is necessarily less prescriptive here. Those responsible for the accuracy of such data should set relevant targets in conjunction with administrators or provider.

TPR recommends that data inaccuracies should be corrected - through the application of action plans - by December 2012. Effectively, schemes are going to have to conduct a formal data audit.

The essential message is that TPR is moving from education to enforcement. The guidance warns: TPR will not hesitate to flex its muscles where evidence of poor record keeping is indicative of inadequate internal controls generally.

TPR is also exploring, with the "auditing community", whether its approach could be supported by a statutory audit process, e.g. the scheme auditor would communicate the existence of poor data.

Take-up of the guidance will be reviewed in 2011.

Aries comment

Administrators struggling to plug gaps in data stored on legacy systems might take heart from coincidental revelations this week about Government pensions data. Money Marketing revealed an admission by HMRC that some of its pension systems are providing unreliable data.

Winding Up

In this new update of its June 2008 guidance, TPR is continuing to advocate a two-year target for the completion of winding-up activities and promises to "intensively" scrutinise schemes which fail ito achieve this objective. Trustees are expected to consider approaches which are both "pragmatic and proportionate" with the key activities to be completed "as soon as reasonably practical" (and in any case within two years). The guidance provides an indication of what TPR deems reasonable practice; it has no intention of acting as a quasi-trustee with regard to winding-up decisions.

Frankly, not a lot has changed as a result of a consultation earlier this year; more like tinkering for clarity. TPR has chosen to ignore respondents who believe two years isn't sufficient, despite justifications such as: delays to GMP calculations; difficulty locating scheme members; and time taken to amend scheme rules. TPR remains staunch; the 2-year deadline is not up for discussion at this time.

TPR has (once more) acknowledged that contracting-out issues (notably GMP reconciliation) can delay winding-up and says these tasks should be commenced at the beginning of the process. The guidance also carries a little extra detail on the PPS form required when surrendering a contracting-out certificate.

More interesting however, is the decision to omit the thorny issue of GMP equalisation - something that attracted a good deal of comment during the consultation exercise - in the hope of avoiding potential inconsistency between the guidance and the latest positions of the DWP, PPF and FAS.

Where TPR is playing an active role in schemes passing through assessment by and/or transition to the PPF or FAS, stewardship will pass to that relevant body.

Added to the list of steps to be taken in a well planned wind-up is establishing a budget for wind-up tasks.

Finally, social networking sites are suggested as one means of locating previously untraceable scheme members. Better tell the IT department to unblock Facebook then.

The Trustee Register

TPR has also recently responded to its December 2009 consultation on proposed changes to The Occupational Pension Schemes (Independent Trustee) Regulations 2005. These Regs require TPR to compile and maintain a register of trustees that satisfy certain conditions.

The Trustee Register is used by the regulator for appointing independent trustees to pension schemes. There are currently 51 trustees on the Trustee Register; some are individuals and others corporate trustee firms. The Register was established in 2005 and after four years of operating it, the regulator proposed changes to how it assesses some of the conditions for registration, viz

• 'overall management responsibility' and 'significant influence' when considering who is a Key Person and an Officer;
• the applicant's 'sufficient relevant experience';
• whether the applicant has 'sound administrative and accounting procedures'; and
• whether the applicant has 'adequate indemnity insurance cover'.

The consultation finished on 12 March 2010. Most responses were supportive of the regulator's proposals. Guidance and new forms are to follow.