Errors were found in half of the data employers sent to providers on the auto-enrolment contributions of their staff, leading some to call on the pensions regulator to step in.
Integration platform Pensionsync, which recently appointed former pensions minister Baroness Ros Altmann as chairwoman, had analysed data on contributions to more than 10,000 schemes between August 2017 and July 2018 and found 50 per cent had to be sent back for correction.
Common errors included contribution amounts that are too high or too low, payments made for workers who do not belong to the scheme or have opted out, or incorrect pay period dates, among other mistakes.
The firm warned greater attention needed to be paid by pension administrators and employers when processing the data and called on The Pensions Regulator (TPR) to put regular data accuracy checks in place.
It said it was "vital" for the watchdog and government to ensure data in new auto-enrolment pensions were regularly and comprehensively checked for accuracy.
"Currently, this is simply not happening," Pensionsync said.
Similar concerns were raised by a compliance expert in March, who said employers and their advisers could be hit with a wave of complaints about errors around auto-enrolment after detecting widespread failings in the way staff were auto-enrolled.
Pensionsync said the problem was the auto-enrolment declaration of compliance – which companies need to file within five months of starting their duties – doesn’t "require a confirmation that the pension contributions and employee pension records have been robustly verified as accurate".
A TPR spokesperson said: "We have no evidence there is any widespread issue of employers keeping inaccurate records or paying incorrect contributions to their staff.
"After putting their staff into a pension, employers have ongoing legal duties including keeping records and maintaining contributions. Research by TPR shows the vast majority of employers are aware of their ongoing duties and are confident they can meet them. A minority rely on a business adviser to meet their duties."
The spokesperson added that employers may be required to make their records available to TPR at any time through its ongoing spot check activities, or if the regulator is alerted to possible non compliance.
The data errors are even more worrying considering the current consolidation occurring in the master trusts space.
Pensionsync said master trust authorisation doesn’t require robust checks on data accuracy or proof that there are proper processes to discover and correct errors.
It said: "It is essential that such processes are urgently introduced to regularly check that pension data are accurate and reliable.
"Once time has passed and if schemes merge, it will be much more difficult to go back and try to reconcile past records. Surely members should be able to rely on the information on their pension statements."
Under the new authorisation process, master trusts will have to hold enough capital to cover the cost of a worst-case scenario, such as the cost of transferring to another scheme or of winding up, without charging members.