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Scheme data under the Regulators spotlight

Information on common and conditional scheme data will be required as part of the Scheme Return for both Defined Benefit (DB) and Defined Contribution (DC) pension schemes in 2018. Are your scheme records in good enough shape?

In 2010 the Pensions Regulator (TPR) set out recommended standards for common data and a target was set for schemes to have 100% of common data in place by 31 December, 2012. Common data includes data used to identify scheme members, such as name, address and National Insurance number.

At the time it was thought that schemes had made some improvements as a result of this exercise, but that many still had a long way to go.

A recent TPR survey of over 500 trust-based occupational schemes (the recent survey) has revealed little recent improvement in record-keeping and as a result TPR has decided that with effect from 2018 information on scheme data will require to be submitted in the annual scheme return.

Common data

As a reminder of the requirements for common data, new data (this is data either created, or updated in respect of a member since 1 June, 2010) requires to be 100% complete and Legacy data (this is data created before 1 June, 2010 and not updated since that date) requires to be 95% complete.

The recent survey found that only two-thirds of members were in schemes with a common data score of at least 95%.

Measurement and targets

In measuring data scores, if only one item of data is missing in respect of an individual member then the whole record of that member fails to meet the standard required and cannot be counted towards the percentage target. So for example if out of a scheme of 100 members, 50 are missing information on their date of birth only, despite all other data being present and accurate, then the data score for that scheme would be 50%.

In addition to the common data, schemes will also have other types of data including conditional data (ie Investment choices, pensions sharing and earmarking order details and transfer in details etc.). There are no set targets for conditional data given that this may vary from scheme to scheme, but TPR expects targets to be set by the trustees working with the scheme administrator, or by the provider. The most recent survey found that just over a third of members were in schemes with a conditional data score of at least 90%.

TPR not only expects the data to be in place, but will also expect schemes to be able to demonstrate action is being taken to achieve and maintain compliance with data and record keeping standards and also that systems, processes and procedures are in place to maintain and if required improve the standards and quality of data.

Other findings

The survey also showed that:

  • Administrators’ understanding of the terms 'common data' and 'conditional data' is not universal.
  • Administrators and trustees perceive conditional data as secondary to common data – two fifths (39%) of administrators felt the measurement of conditional data was not a priority for their scheme.
  • Record-keeping is not always seen as a priority by trustees and they do not engage with their administrators accordingly – a quarter of administrators (23%) felt that trustees treated record-keeping and administration as a low to middling priority (0 to 6 out of 10). This went up to 32% for micro schemes, while trustees of Automatic Enrolment (AE) schemes were perceived to be more engaged with record-keeping than non-AE trustees.

Key to trustees ensuring that data standards are improved and maintained is engagement with the scheme administrator.

Trustees should request information on current data standards and scores for both common and conditional data, and if there are any issues with these put in place an action plan to improve the position.

For information about the regulations and requirements around pension scheme data, please contact our specialists below.

This information is intended as a general discussion surrounding the topics covered and is for guidance purposes only. It does not constitute legal advice and should not be regarded as a substitute for taking legal advice. DWF is not responsible for any activity undertaken based on this information.

Maureen Burns

Senior Solicitor

I am a Senior Solicitor in the Scottish Pension team with over eight years' experience of advising employers and trustees of pensions schemes on a broad range of pensions law issues.