The government has responded to feedback on its consultation on changes to the Public Service Pensions (Record Keeping and Miscellaneous Amendment) Regulations 2014, which set out rules on LGPS data standards.
It is due to lay regulations based on the response in the autumn. The response details what member information schemes must hold.
In 2013, in preparation for its new oversight of public sector pension schemes, The Pensions Regulator conducted research into the data and administration standards of the LGPS as well as unfunded schemes such as those for the NHS, fire fighter, teachers, civil servants, armed forces and the police.
TPR’s research found that the LGPS is, broadly, in a far better position than other public sector schemes in terms of data and administration.
According to TPR’s September 2013 survey of the LGPS, 81% of arrangements are administered in-house. Most LGPS funds have documented services standards against which they report, with 66% disclosing the turnaround times for requests. 87% of funds monitor, and 85% publish administration costs.
Generally LGPS funds have not measured or are not aware of having measured their common (56%) or conditional (81%) data, but for those who do not, most plan to do so and already produce other reports on record quality.
Of those funds that have measured their common data scores, the scores were generally 95% or higher. Just one in five schemes said they had been alerted to common data problems in the last year, and 18% had been made aware of other data problems.
The draft regulations said that LGPS fund managers must keep a record of the following:
- the name, birth date and last known postal address of each member and beneficiary;
- the dates on which each member joins and leaves the pension scheme;
- each member’s scheme identification number;
- each member’s employment with any participating employer, including the period of pensionable service in that employment and the amount of pensionable earnings in each year of that employment;
- the formula used to calculate each member’s pension;
- any information relevant to calculating a member’s rights a pension credit or a pension debit.
Many respondents to the consultation suggested adding other data to the list of essentials, such as members’ marital status or email addresses, which the government has rejected. However, it has taken on board the proposal to require schemes to hold data on members’ gender, as this is relevant to their accrual.
The draft regulations require that LGPS scheme managers must keep a record of:
- any contribution paid in relation to a member;
- payments of pensions and benefits;
- payments made by the scheme to anyone including the name and address of the person paid and the reason for the payment;
- any transfer of assets from the scheme to anyone including the name and the address of the person receiving the transfer and the reason for it;
- the receipt or payment of money or assets concerning the transfer of members in or out of the scheme including the member’s name, the transfer terms, the name of the scheme making or receiving the transfer, the date of the transfer, and the date of receipt or payment;
- payments made to a member who leaves the scheme, other than on a transfer, including the member’s name, leaving date entitlement, the method used for calculating an entitlement and how that entitlement was discharged;
- payments made to the employer;
- other payments to and by the scheme including the name and address of the person receiving or making the payment.
The government said it will amend the regulations so that schemes must also record amounts owed to the scheme that are written off.
It asked for suggestions for how scheme managers can be satisfied that member contributions were being paid on time, but noted in its response that no viable alternatives to the record keeping requirements above were proposed.
From April 2015, administering authorities must put in place pension boards. The government set out which board records scheme managers must keep.
It said scheme managers must keep records of pension board meetings including:
- the date, time and place and all of the invited board members of each meeting;
- the name of any person who attended the meeting and the capacity in which each attended;
- any decisions made at the meeting.
Based on consultation responses it received, the government said it would not lay down in regulations the period for which records must be kept. However, it said TPR will issue a code of practice on public sector pensions and this will include guidance on the length of time for which scheme managers must keep records.
TPR head of policy for defined contribution and public service pension schemes Phil Yeoman explains how TPR will oversee LGPS data standards
Our expectation is that public service schemes will strive to be compliant so we would expect enforcement action to usually be the last resort. Any powers exercised would depend on the circumstances of each case.
Enforcement powers available to the regulator include: directions to carry out certain tasks such as rectify gaps or errors in member records; using Improvement or Third Party Notices under sections 13 or 14 of the Pensions Act 2004 and penalties for failure to comply with those notices.
Other powers include: those to obtain information; publishing reports of the consideration given to the exercise of its functions in relation to a particular case and the results of that consideration; and the use of a skilled person to either advise the pension board or report to us on any relevant matter.