TPR’s web-based scheme return questions cause industry mayhem

For 2022, the watchdog included new questions for defined benefit and hybrid schemes to respond to by March 31 in their annual scheme returns, which are being presented in a web-based form.

Trustees of DB schemes, for example, need to point to the website addresses where the scheme’s statement of investment principles, implementation statement and climate change report have been published, the trustee assessment of the employer covenant grading, or provide more details about their value for money assessment.

The remainder of the scheme return is filed through Exchange, a platform used for several years by trustees and their advisers that allows different people to add information to the form, review, print and share with colleagues before sending to TPR.

TPR has gone for a quick fix without really understanding how the industry completes these things; it is highly technical and the consequences of not completing it correctly can be expensive, with higher Pension Protection Fund levies or even fines from TPR

Jaime Norman, Broadstone

Audit trail made impossible

Several pensions specialists have told Pensions Expert that the new web-based form, similar to an online survey, is causing mayhem for schemes as there is no way of double-checking the information being submitted.

Stephen Maguire, consultant at LCP, said: “The introduction of a two-stage process for submitting the scheme return has introduced a degree of risk, as stage one is a web-based form that has to be input and submitted immediately with no facility to save or print the data.”

This is of special concern, since several trustee boards delegate the task of filing the scheme return to their consultants, advisers or administrators, but will be responsible if the information provided is not accurate.

Maguire added: “Those submitting scheme returns (and the trustees who are ultimately responsible for the data submitted), cannot evidence their checks and maintain a complete audit trail.”

Jaime Norman, actuarial director at Broadstone, argued that it is “very disappointing that TPR has not been able to incorporate the new questions into the existing form, as it makes verifying the responses with trustees and recording an audit trail very difficult”.

He noted that “while TPR was good at signposting the new questions in advance so that trustees could prepare, the implementation has left a lot to be desired”.

“TPR has gone for a quick fix without really understanding how the industry completes these things; it is highly technical and the consequences of not completing it correctly can be expensive, with higher Pension Protection Fund levies or even fines from TPR.”

Norman argued that the fact that schemes delegate these tasks to their advisers “appears to have been missed by TPR and it is surprising it doesn’t appreciate the difficulties this has introduced to what should be a routine process”.

“This risks damaging the brand of TPR in trustees’ eyes as it gives the impression that providing scheme information for TPR’s use is of secondary consideration to the user experience,” he added.

Maguire stroke a similar note: “It is worrying that TPR’s existing systems did not appear to be flexible enough simply to incorporate new questions into the existing process.”

Hopes for a fix in next year’s return

Matt Riley, manager at independent trustee company PTL, who has encountered similar issues, noted that it would be easier if the questions were introduced in the scheme return that is filed through the Exchange platform.

He said: “The scheme return has been amended in the past, it’s not like it has been set in stone for a number or years. 

“You can see why they are asking for the information, and the scheme return is the place to ask for it, but hopefully next year they will have the time to incorporate these questions in the full scheme return.”

In response to the criticism from the industry, a TPR spokesperson said: “For this year’s DB and hybrid scheme returns we introduced additional questions, which must be completed and submitted via an online form rather than Exchange.

“Guidance on completing the online form is available on TPR’s website, and our customer support team is ready to support those administrators, advisers and trustees who want extra help.”

The spokesperson noted, however, that TPR continues to work on developing new systems for the scheme return and will inform its “regulated community once they are in place”.

Nevertheless, they added: “We would remind trustees that if a scheme return hasn’t been completed and submitted by the deadline stated in the scheme return notice, this may be a breach of their legal obligations and they risk a penalty.”  

Pensions Expert understands that no complaints have been made so far on this matter to TPR, and there are other industry players who are not encountering issues with the process.

Clare Kember, senior trustee manager at Ross Trustees, said: “In our experience, TPR’s streamlined process is intuitive and simple to follow.

“The most notable change is the initial email containing questions posed by TPR as a first stage. However, these are straightforward queries exploring standard areas of scheme governance.

“Other elements of the process are very similar to TPR’s previous approach and we have not experienced any obstacles. So all in all, it has been plain sailing.”