Local pension schemes 'struggle' to get to grip with responsibilities - TPR

Locally administered pensions schemes are struggling to get to grip with their responsibilities, The Pensions Regulator (TPR) has revealed.

In its Public service governance and administration survey 2018 published today, 26 July, the regulator said that it sees “room for improvement” in police, fire and local government schemes’ administration, which continues to garner the majority of complaints.

In particular, the watchdog highlighted that only half of schemes have had four or more board meetings in the past 12 months.

The report said: “We are concerned that irregular meetings may be an indicator of poorly governed schemes. We note that fire schemes had both infrequent meetings and were the most likely cohort to postpone meetings. We expect to see an improvement in this area.”

Commenting on the survey, Dalriada Trustees senior trustee representative, said: “TPR is right to advise that scheme governing bodies should meet on a quarterly basis, if not more often. Regular pension board meetings are the best way to ensure that schemes are run properly and avoid poor governance practices.

“Trustees who frequently attend board meetings are better placed to make timely decisions, while those who meet less are more likely to miss important opportunities. Schemes who host irregular meetings often find that they gradually let go of the reins which leads to schemes being run by their advisers instead.”

The regulator added that just under three quarters (74 per cent) of public service schemes had all six of its governance procedures in place, “an improvement on previous years” but still “disappointing”.

It did see improvements on knowledge and understanding across public services schemes but was disappointed that four-fifths (82 per cent) of schemes evaluated the boards knowledge and understanding annually.

“The concerns expressed by respondents about knowledge and understanding may partly be driven by the significant annual turnover in pension board members. On average schemes reported that 20 per cent of the total positions on their pension board had left in the previous 12 months,” it said.

Eleven schemes completing the survey said they were operating with fewer board members than required by regulation.

Roughly three-quarters of schemes said they had data issues, lower than the regulator expected “given that common data includes addresses which can rapidly become out of date”.

TPR concluded: “The pattern of results this year indicates that while pension boards have managed to drive improvements in some areas, they continue to struggle in many others.

The locally administered schemes appear to find it particularly hard to meet their responsibilities. There are a variety of reasons for this depending on the exact circumstances of the scheme.”

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