This document summarizes a presentation on reconciling contracted-out pension records between scheme administrators and HMRC. Some key points: - Equiniti has reconciled over 7 million member records across 36.5% of HMRC's total, including both live and ceased public and private sector schemes. - The typical reconciliation process involves 3 phases: analysis of data, reconciliation between administrator and HMRC records, and rectification of any anomalies found. - Initial analysis of 34 completed schemes found 48.23% of records matched, 20.27% only on HMRC records, 10.13% only on administrator records, and 21.37% with issues. - Both HMRC and the industry

1. Contracting-out Reconciliations:
A view from the front line
Workplace Pensions Live, 11 May 2016
Stewart Winter, Operations Director – Data Solutions

2. Agenda
2
Equiniti’s Portfolio
The “classic” 3-phase approach
The COLR Project
HMRC and the industry
The correct tolerance to apply
Doors closed?
Q&A

3. The question is; is it too late to start the reconciliation project?
Doors closed?
3
 If you have completed your Expression of Interest with HMRC by 5 April 2016
 However the clock is ticking to complete reconciliation
 And more and more schemes are actively engaged with their reconciliation projects
 If you did not complete or chose not to submit your Expression of Interest with HMRCYES
NO

4. Equiniti’s Portfolio
4
Contracted-out
Liabilities
Reconciliation
(COLR)
Programme
• C7.3 million contracted-out members
• C36.5% of total HMRC records or 1 in 3
contracted-out members.
• Public Sector (funded and non-funded)
• Private Sector (live and ceased
schemes).

5. The “classic” 3-phase approach
5
Phase 3
RECTIFICATION
(PUTTING RIGHT OF
DATA ANOMALIES &
PENSIONS IN
PAYMENT)
Phase 2
RECONCILIATION
(ENSURING ADMIN &
NICO AGREE)
Phase 1b
“SURING-UP” ON DATA
ANOMALIES
Phase 1
ANALYSIS

6. Scheme Averages within Equiniti’s Programme
The COLR Project
End of Phase 1b
6
End of Phase 1
• Based on 34 schemes completed to date
• Equating to 2,535,736 amount of members
• Based on 18 schemes completed to date
• Equating to 497,758 amount of members
Matched,
48.23%
Not on NICO,
20.27%
Not on Admin,
10.13%
Issues, 21.37%
Matched Not on NICO Not on Admin Issues
Matched,
59.03%
Not on NICO,
8.30%
Not on Admin,
8.69%
Issues, 23.98%
Matched Not on NICO Not on Admin Issues

7. Issues
HMRC and the industry – working together
• Shutting their doors end of 2018
• Under 3 years left to reconcile
• Conservative estimation that c10,000 queries per day
will need to be answered
• C4,500 live / c2,000 ceased schemes
• Public sector to flood HMRC queries from Easter /
Summer 2016
• Resource constraints and re-deployment.
HMRC
• Not joined up
• Differing methodologies
• Inefficient and ineffective working practices
• No clear guidance.
INDUSTRY

8. Solutions
HMRC and the industry – working together
 Working together
 Escalation point with Client Relationship Manager
 Sharing of ideas through working groups
 Align comments on queries to HMRC, ultimately to ensure HMRC work as a ‘factory’
 Frequent HMRC conferences
 tPR, PASA etc.
 To issue guidance on a regular basis
 Clear and concise
 Informative yet pragmatic

9. TPR’s advised £2 per week
 Only recommended for ceased schemes going through wind-up
 Inappropriate for ‘live’ schemes
What is the correct tolerance to apply?
9
Tolerance misconceptions
 a. Comparing the end result of two calculations
 If all inputs are the same there should be no tolerance to apply
 b. The reality of setting a tolerance higher than one of
pure rounding
 HMRC guidance is to adopt HMRC’s figures
 The cost on rectification calculations and system updates
 Potential extra trustee/scheme’s cost in relation to arrears

10. Q&A
Many thanks for your time tonight, please feel free to ask
any questions.