In August 2020, Hymans Robertson published analysis stating around 70 percent of defined benefit (DB) pension schemes would fail to meet the Pension Regulator’s (TPR’s) fast track requirements. Research by the consultancy found that just 30 percent of schemes would pass all four of the proposed fast track tests on long-term objectives, technical provisions, recovery plans and investment risk.
Trustees, keen to get on the ‘fast track’ are focusing on their integrated journey plan and we regularly see efforts being concentrated on three key interconnected elements:
- Scheme funding
- Investment strategy
But to use an old analogy, ‘a band is only as good as its drummer’ a Scheme is only as good as its data. Rather like the ‘Fab Four’ without Ringo Starr or the Stones without Charlie Watts, without good data the sound of your Scheme is incomplete.
Over 11 years ago, the Regulator introduced the concept of Common and Conditional Scheme data introducing guidelines for Schemes to become aware of what data their administrators needed to hold to enable them to administer their pension scheme. The Regulator has recently been showing their teeth, asking selected Schemes over the last 12 months to provide evidence of their data reviews. They expect a data review to have been undertaken in the last three years and are prepared to issue fines and improvement notices to ensure Schemes and Trustees sit up and take notice.
If your Scheme’s TPR data scores are looking good, does that mean you can file data in the completed folder – well not necessarily. . . TPR data requirements are basic and as well as getting ready for the Fast Track, there are a number of other hurdles ahead, not least of which is GMP Equalisation and of course let us not forget the pensions dashboard.
Advisers working with Schemes to prepare them for buyout are generally recommending a full data audit 5 years prior to any planned buyout date to make sure there are no unexpected delays or surprises, which could lead to increased costs or even last-minute derailment of the buyout plan.
Wherever your Scheme is on its journey, making sure you have a data plan should be part of all Trustee Board agendas and is becoming a key part of our planning for administration subcommittees and operational reviews.
Lucy Tindal leads the Secretariat Service at Pi Consulting, and with over 25 years’ experience in the pension industry has been involved in acting as a Pension Scheme Secretary to a number of leading Trustee Boards. Prior to joining Pi, she was Pension Manager for the Parliamentary Pension Schemes where she managed the in-house pension team.