Many pension schemes fall short of regulatory standards for measuring data quality and maintaining accurate records, The Pensions Regulator has said.
It set targets for schemes to meet its 'common data' standards by the end of 2012. These concern name, date of birth and National Insurance number, needed to identify scheme members.
Louise Hallard, the regulator's policy lead for defined contribution, governance and administration, said: 'The latest research results show there is still some way to go for schemes to achieve high standards across the board. This will become increasingly important for members of defined contribution schemes with the introduction of automatic transfers by government.' She said the regulator was conducting a detailed review to establish whether schemes had met targets for keeping accurate records.
Those that breached legislation could face improvement notices and financial penalties, Hallard warned.
This year's survey showed that 96% and 94% respectively of large and medium trust-based schemes are engaged with the measurement of common data and more than half meet the target.
But measuring 'conditional' data -such as contribution history, date of leaving and other items needed to accurately calculate a member's benefit - was less of a priority for them. This was particularly evident in larger trust-based schemes, where, of the 42% that have not generated a conditional data score, 29% said it was not a priority.
Half of small trust-based schemes who do not measure this score were not aware of the requirement to do so. More than 9.2 million trust-based members are in schemes with a common data 'score' of 95% of present accurate data or greater. However, 2.3 million people are in schemes where the common data is not measured or significant improvements are needed to meet a level of at least 95%.
Of schemes that have measured their common data more than once, more than 90% have registered an improvement between their first and most recent measurement.
The regulator plans to publish results of its detailed record-keeping review towards the end of the year.
Carole Ward, administration partner at actuaries Barnett Waddingham, called the findings 'very disappointing'.
She said: 'It is now over three years since the regulator published its record keeping guidelines and targets, and yet only 40% of trust-based scheme administrators and 18% of contract-based scheme administrators could name the regulator's common data targets, despite initiatives within the pensions industry to raise the quality of pensions administration.
'We welcome the news that the regulator is now carrying out a very detailed review to establish whether schemes have met the targets for keeping accurate records.
'Trustees and administrators need to understand that this isn't going to go away. They may find themselves uncomfortably in the regulator's spotlight if it finds that poor record keeping has resulted in breaches of pensions legislation.'
