The Association of Professional Pension Trustees (APPT) has slammed the regulator’s plan to introduce a statement of strategy (SoS) criticising its “onerous data requirements” which it says are unlikely to benefit members.
The APPT says it has “grave concerns” about these plans and called instead for a “material cull” of the proposed requirements. It has says that rather introduce these new statements, a smaller volume of additional data could be collected via the annual scheme return.
The APPT adds that it was unclear what problem the SoS was trying to solve, but that it was hard to see who would benefit from trustees collating what it describes as the “endless items of data” proposed in these statements.
APPT chair Harus Rai says: “The Statement of Strategy (SoS) that will need to be completed for schemes is very lengthy with endless items of data, as outlined in the example document released as part of the consultation.
“Our members feel that the SoS needs to be materially cut down. In our view only a minority of the data items it is proposed to collect is helpful, and the rest do not add value or clarity. For example, it is not clear to us what the benefit is to anyone of generating and providing estimated cashflows for the next 100 years.”
The APPT response adds that much of the data schemes will need to provide becomes stale very soon after it has been provided. Therefore, we are not sure how useful it will be to TPR and to trustees or members.
The APPT also says the regulators have failed to take into account that t that trustees are not the only decision makers when it comes to running a pension scheme, and employer play a significant part. For example, the response notes that whilst the Trustees could be targeting buy-out, the employer may decide they want to follow a run-off approach instead. It says where this is agreed, most of the entries in the SoS would immediately become of little value.
TPR says the SoS is “required to improve the sustainability of DB schemes” but the APPT says: “We struggle to agree with this statement.”
It adds that theseextra requirements and costs diminish the sustainability of DB schemes, particularly smaller schemes of less than £50m which still equate to around 60 per cent of all DB schemes.
The APPT says that the TPR has underestimated the cost and time taken to complete this new requirement. Rai adds: “Overall, many of our members are not sure what problem the SoS is trying to solve. To impose onerous additional data requirements on those schemes that are now well-funded and largely de-risked seems to be disproportionate regulation that conflicts with Government regulatory policy.