Most members will have paid into schemes for years and looked forward to retirement. If the wrong calculations impact their ability to live the future they imagined, is it any wonder data quality is a contentious issue?
Why data matters
Guaranteed Minimum Pension (GMP) reconciliation and the General Data Protection Regulation (GDPR) may have made data a headline issue, but regulation should not be the driving reason to close data gaps. It’s about governance and effective pensions administration. Data matters for two key reasons:
- It helps schemes ensure members end up with the value they’ve worked so hard to accumulate
- It prevents schemes over or underpaying members, reducing the need to make costly, reputation-risking corrections at a later date
To find out how the industry is reacting to data risks, Equiniti commissioned questions around data quality in the 2018 Professional Pensions Administration Study. While trustees, administrators, managers and business leaders are aware of the importance of data, worryingly, we found that many were not hyper-concerned about the quality of their own data.
We see time and again that schemes are running on poor data and yet only a quarter of respondents believe the quality of their data will be a hindrance to delivering their planned projects this year. Most therefore believe their data is already good enough. But the reality is, little is being done to get schemes in order for the long-term.
Ensuring data quality is a behaviour and even where one-off data cleansing projects have been undertaken, the likelihood is that discrepancies, miscalculations and omissions exist. As such, it’s likely we will continue to see fines being levied by the regulator for poor data, impacting not just the financial health of schemes but also businesses’ hard-fought-for reputation.