Altmann urges regulator to check pension data

Altmann urges regulator to check pension data

Former pensions minister Baroness Ros Altmann is urging The Pensions Regulator (TRP) to check pension contribution records for accuracy in 2019.

Baroness Altman said it was vital the watchdog "turns its attention towards ensuring pension contributions are paid correctly".

She said: "It is well known that legacy pension records are unreliable, as old pensions were recorded manually and never transferred to digital format.

"However, even with the latest contributions under auto-enrolment, it has become clear that there is no proper process in place for ensuring the contributions paid are correct."

Baroness Altmann said current rules for auto-enrolment, introduced in 2012, emphasised the importance of employers making contributions for their staff, and that there were strict requirements, checks and whistle-blowing regulations that were designed to ensure employers complied with their duties.

However, these focused only on whether or not money is being paid, she noted.

She said: "As long as a contribution is made, there seems no concern about whether it is the right amount. No requirements to report to the regulator that the accuracy of records has been checked, errors do not need to be regularly reported or corrected."

FTAdviser reported in October that errors were found in half of the data employers sent to providers on the auto-enrolment contributions of their staff between August 2017 and July 2018.

Baroness Altmann warned the pensions dashboard project, due to come into effect from 2019, would not succeed if the underlying data were wrong.

In her predictions for 2019 she was also expecting a greater emphasis on digital integration of pension contributions between payroll and providers. This would improve accuracy, efficiency, security and reliability of data, and lower costs.

She said: "Cutting costs of administration can be achieved by ensuring more pension contributions are moved onto digital platforms via application programming interfaces (APIs), which can improve the accuracy, security and reliability of pension data."

In other areas, Baroness Altmann said she was expecting cessation rates in auto enrolment to stay low despite the increase in contributions to 8 per cent in April 2019.

She also predicted consolidation among master trusts, as the authorisation window closes in March 2019, and a similar trend among defined benefit (DB) pension schemes.

Baroness Altmann also expected collective defined contribution (CDC) schemes legislation to come into effect during next year, while the new Single Financial Guidance Body is expected to start work on the pension dashboard project.

She added she hoped "serious attention" would be paid to the low earners pension tax relief problem, which is currently affecting about 1.2 million workers, and that pension coverage for the self-employed was improved.

Last but not least, Baroness Altmann said she hoped pension schemes and providers would introduce simplified statements during the next year in an attempt to reduce the "baffling, impenetrable jargon" of the industry.