Workplace pension provider Now: Pensions is still fighting to fix data issues with some large employers that cost it tens of thousands of pounds in fines, but said it has solved the problems faced by most members.
The scheme, the third largest auto-enrolment provider in the country, with 1.5 million members, received a £70,000 fine in February from The Pensions Regulator (TPR).
The watchdog determined that Now: Pensions trustees must complete a number of steps to fix the “long-running issues” of its pension scheme, by specific deadlines over the period to July 2018.
The provider suffered several delays processing some contributions and communicating with a portion of members.
The problem was created by joining different software, some proprietary and some external.
In July, the provider withdrew itself from the regulator’s list, which signposts employers to schemes that have obtained an independent audit of their governance standards and controls.
At the time, TPR expressed concerns about the governance and administration of the scheme, including delays processing some contributions and communicating with a portion of members.
To solve this problem, the provider has been building a large internal operation out of its office in Nottingham for Now: Pensions Gateway proprietary software. This was launched for new clients at the end of last year.
According to Troy Clutterbuck, chief executive of Now: Pensions, by April all of the provider’s 32,000 clients were using Gateway, and “the majority of employers were up to date”.
He said: “We have a small number of larger, more complex clients we have been meeting with individually to agree their reconciliations. We are grateful for the help and co-operation of employers with this work so we can bring all member accounts up to date very shortly.
“We have also completed unit adjustments for the majority members affected by delays processing contributions to put them back in the position they would have been in had their contributions been processed in a timely manner.
“We’ve communicated this to affected employers and members will be able to see their adjustment on their next benefit statement. Where we are finalising reconciliations with employers, members will have adjustments to their funds applied as soon as possible.”
The provider declined to confirm, however, that it has complied with all deadlines set up by the regulator.
A spokesperson said: “We are required to take all reasonable steps to comply with TPR’s notices and we are satisfied that we have done that.
“We are keeping TPR regularly updated as we complete the outstanding steps.”
Even if the scheme doesn’t comply with all the targets set up by the watchdog, it could escape further fines, if it shows it has been working on these goals.
A TPR spokesperson said: “improvement notices and third party notices issued to scheme managers and trustees are designed to make the parties focus on resolving issues as swiftly as possible, for the benefit of all of the affected members.
“The notices direct the parties to take certain action within specified deadlines. If the parties fail to meet those deadlines without good reason we would consider whether it would be appropriate and proportionate to fine them for the failure if they have not taken all reasonable steps to comply.”
According to Martin Bamford, chartered financial planner at Informed Choice, Now: Pensions "appear to have been a victim of their own success, struggling to reconcile such a large volume of transactions".
He said: "The role of an auto-enrolment provider should be pretty simple, but requires very effective processes, which Now: Pensions don’t appear to have had in place from day one.
"Playing catch-up when you’re processing such a large volume of relatively small transactions each month is nothing to be taken for granted and Now: Pensions should have taken more seriously the importance of launching a consistently perfect system.
"If Now:Pensions fail to meet the deadlines imposed by their regulator, it indicates more serious management failures which need to be resolved quickly, to get the organisation back to a position of operational excellence. I sense another large fine on its way from The Pensions Regulator."
maria.espadinha@ft.com
