In July Now: Pensions withdrew from The Pension Regulator’s Master Trust Assurance Framework approved list of providers following revelations that since its launch in 2012 it had been beset with administration problems that meant contributions were not being applied to scheme members’ accounts. Chief executive Morten Nilsson exited the company in August. His replacement, interim CEO Troy Clutterbuck, tells Corporate Adviser where things have gone wrong, and what is being done to put them right.
What administrative problems have Now: Pensions been experiencing?
We are talking about delays in processing contributions through the system. The problem was with the data we were receiving in from employers which was incorrect, incomplete or simply missing. This got held up by the system we had in place. Before the money was collected, the employer would send us the data. That is then checked, and once it meets our criteria, our TPA requests it. Because our system was rejecting incorrect data, we weren’t collecting contributions.
Which technology provider were you using for your front-end?
We were using Equinity Paymaster, and we switched to JLT at the beginning of 2015. The issues came to light when this transition happened. That opening portal, which was supplied to us by Equinity, wasn’t picking up incorrect data. Since we have built our own system, we are not having any problems.
How have you changed your front-end system?
We have a new front-end system called Gateway, which we built in-house at a cost of £4m. Gatesway is supported by TCS, part of Tata – we have gone with a blue-chip supplier to get an ironclad solution. At present 11,000 clients and are using it, out of 28,000. We are in the middle of a staged transition, moving everything across to Gateway.
What is the scale of the problem and how long has it been ongoing?
The number of employers impacted is only small. If the employer did send the information correctly then there has not been a problem. Some of the issues date back to 2012. The difference now is if someone transferred into the Staffcare system, we can grab problems easily now. Once everyone is on Gateway we won’t have these problems at all. We are still working on parts of the outstanding backlog, some of which date back years. The transfers will be completed very shortly, in a matter of months.
What has been the impact on members?
Most haven’t noticed anything, but some who have asked for a transfer value or reached retirement have. Any member that has been impacted by these days delays will be compensated in full by us.
Markets have risen over the period the problems have been happening. Won’t that cost Now: Pensions a big sum to put everybody back to where they should have been?
Yes there will be a material cost to it that we have made a corporate decision to stand behind these promises. We are not talking tens of millions of pounds, but we can’t say how much it will cost at this point.
How come the board of trustees hadn’t spotted this and dealt with this. Does this not ask serious questions of the effectiveness of the trustee board?
The trustees were aware of the issues immediately although we acknowledge that resolving matters has taken too long.
Will you be applying for readmittance to the Master Trust Assurance approved provider list on TPR’s website?
As a priority we want to get everything solved, and then moving forward we will consider getting back on to the master trust assurance framework list when the time is right.
What is your message to members, employers and intermediaries?
This has to be a hold our hands up moment. The fact that we are talking about this in 2017 when we have these problems for quite some time is not right. We are approaching the problem as openly and transparently as possible.
And we are sorry for those members that have been affected. No one should be affected in this way. We are looking to get these issues resolved as quickly as possible so that we can stop looking backwards and start looking forward to the future, which we think is bright.