The Pensions Act 2004 requires all occupational pension schemes to complete a scheme return at least once every three years. This is sent to the Pensions Regulator and provides up-to-date information. Processing scheme returns of 2-4 member defined contribution schemes once every three years currently incurs disproportionate cost to the Pensions Regulator and to the schemes which are a low-risk group. Amending legislation is proposed to increase the period within which this group of schemes is required to complete a scheme return in order to generate efficiency savings for the Pensions Regulator and reduce burden on schemes and employers.
The objectives of this policy are to: i) reduce the cost burden to industry, ii) support the Regulator in upholding a proportionate and risk-based approach to regulation by collecting the amount of data from schemes which is proportionate to scheme size and level of risk, and iii) generate efficiency savings for the Regulator.
The impact assessment considers three options: Option 1: Amend legislation to require schemes with 2-4 members to complete a scheme return within every five years (this is the preferred option). This option balances the realisation of savings for the Regulator and the industry with low risks to the quality of scheme data. Option 2: Amend legislation to require schemes with 2-11 members to complete a scheme return within every five years. Option 3: Do nothing.