The London Borough of Barnet Superannuation Fund has seen a visit from the regulator after it suffered £1.7m in late contributions.
The Pension Regulator today (October 25) published a regulatory intervention report outlining how it has worked with the manager of the council's pension fund to improve governance and administration standards which it stated had led to “significant improvements”.
The pension fund had experienced a catalogue of errors, including £1.7m of late contributions and a lack of clarity over its member data. Many of the errors were to do with the way it collaborated with third parties.
After engaging with the fund, the TPR raised concerns about delays in providing information to members, and that these had not been reported in a timely manner.
This meant savers didn’t receive the information they were entitled to on time and there was also the possibility that the information they were sent was incorrect.
The TPR first took action against the scheme in 2017 when it issued a fine of £1,000 after the fund failed to submit a scheme return.
This was the regulator’s first ever fine for a public service pension scheme.
In May 2019 the scheme manager was sent a warning notice after the TPR had concerns over breaches of law.
Two months later the regulator issued an improvement notice which required the scheme to monitor contributions on a monthly basis, complete the first two phases of a data cleansing plan and provide accurate annual members benefit statements for 2018/19.
An improvement notice requires a scheme manager to complete a series of steps to rectify failures within the scheme, or to stop taking inappropriate actions, within a specified timescale.
Failure to comply with such a notice can result in a penalty of up to £5,000 for individuals and up to £50,000 for other entities.
This was the first time the TPR had issued an improvement notice to a public service scheme solely focused on internal control failures.
When the regulator stepped in to help, it noticed that the scheme was heavily-reliant on third party service providers and had little oversight as to what these providers were doing.
This has been rectified and the scheme manager now receives more detailed reports while a process has been put in place so that the manager is able to challenge the information they receive.
However, the TPR stated when better internal processes were implemented further errors came to light dating back years, although steps have now been taken to correct these, it added.
The TPR will not take further action against the fund.
Mike Birch, TPR’s director of supervision, said: “As a result of our work with the scheme manager the fund’s more than 27,000 members can be more confident that the scheme is being properly managed.
“Since we started engaging with the scheme manager with have seen a significant improvement in administration of the fund.