ITM says tPR not tough enough and predicts potential conflicts arising

03-Jun-2010

ITM says the final tPR record keeping guidance is simply not tough enough and not specific on how the new regime will be policed and reported on

Not tough enough
Independent Transition Management (ITM), the specialist data, administration consulting and IT support provider, said today that the Pensions Regulator’s (tPR) latest guidance on record-keeping, whilst a positive step forward, falls far short of what could have been possible.

The revised Guidance still has a target of 95% accuracy for legacy Common scheme data and has scheme specific targets for all Conditional data. Commenting, Phillip Bretnall, Director at ITM, said, tPR initially said they would take a far tougher approach on record keeping and although the final Guidance is a positive step forward, we don’t think it is tough enough. Anything less than a 100% target for a scheme’s data must be considered a fail and the regulator has missed an opportunity to address this.’

Bretnall added, 'The question is, would anyone accept 95% accuracy in other areas of their life – bank accounts, for example? No, yet this appears to be accepted in the pension administration community.

Conflicts?
We also see potential conflicts of interest arising from the Guidance. For example, can the trustees really expect their administrators to report on their data with total objectivity? Trustees wouldn’t ask the administrators to audit their own accounts – ITM see similar conflicts with data auditing. A degree of independence is essential. tPR seems to acknowledge this as it appears to require the financial auditors to assume a ‘policing’ role in reporting data issues to the trustees. ITM believes in this principle but this will be difficult for accounting firms who are not data specialists overall.

Trustee disclosure
Finally, ITM would like to have seen stronger emphasis in trustee disclosure in the accounts. Why shouldn’t trustees report to members via some form of general risk management certificate that covers data certification? It demonstrates compliance with a legal requirement – members have a right to know.