Up to 64% of occupational pension schemes in Britain are not compliant with the Pensions Act, the Oc...
Up to 64% of occupational pension schemes in Britain are not compliant with the Pensions Act, the Occupational Pensions Regulatory Authority (Opra) found in an extensive survey released this week.
The watchdog, which randomly surveyed 1,000 schemes, says that although 36% of the schemes were fully compliant with the Pension Act, many of the remaining non-compliant schemes involved breaches of the regulations relating to improper documentation.
The survey notes that although most schemes had appointed statutory reporters (an auditor and actuary), often the appointment documentation did not follow the prescribed requirements. Opra has warned trustees that it will not take a lenient approach if future appointment documentation is not fully compliant.
The biggest single issue of non-compliance was failure to appoint, or follow the requirements for the appointment of, a scheme auditor. This was the case in 52% of money-purchase schemes surveyed.
Opra found that trustees of many money-purchase schemes still appeared to have failed to understand, or not paid due regard to, how the requirements of the Pensions Act applied to them.
"This was often the case where the employer was the sole trustee. We are concerned that 37% of the money-purchase schemes surveyed had the employer as sole trustee," the watchdog points out. It also appeared that less than one-third of all the schemes surveyed had appointed member-nominated trustees.
Other breaches Opra identified, particularly with money-purchase schemes, was a heavy reliance on guidance from insurers with regard to Pensions Act compliance. In addition, Opra criticized the unhurried approach among scheme trustees to inform the Pension Schemes Registry about any changes to a scheme, or when the scheme is wound up.
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