The survey had 220 UK pension professionals respond, with an overall, 40% describing their occupation as a Trustee and 35% being pension scheme administrators or managers. The remainder of respondent’s occupations included CEOs, finance directors and HR directors and managers.
Alarm bells ring as the reality of the results are not shining the spotlight on data as much as we would have expected. In my mind it raises the question, do schemes truly understand the importance of quality data?
Is data really that important?
Data is a subject that has been underestimated since the introduction of the pensions industry. Throughout history, schemes have seen data more as a just-in-time or project based task, only really paying it attention when crucially needed, which in many cases is already too late. Other than that it is forgotten about.
You can achieve amazing things with data if you know how to make it robust and it all starts with the quality. Then you can realise its potential.
With Guaranteed Minimum Pensions (GMPs) reconciliation in full swing and General Data Protection Regulation (GDPR) coming into play, it is becoming more apparent that data is at the heart of it all. So what better time than the present to start thinking about the quality of your data in order to mitigate reputational risk and minimise cost impact.
So yes, data is really that important. There’s a significant responsibility on you to resolve and manage issues surrounding scheme data, with the future of peoples’ lives in your hands. You are trusted with the responsibility to make the best decisions for your members, and data is at the heart of that.
GMP Rec readiness
The survey gathered 220 respondents in both the public and private sector, with 72% of respondents being responsible for Defined Benefit [DB] schemes. We asked them, which pension projects are a top priority for them over the next 6-12 months, with almost half answering GMP reconciliations. With GMP rec relying heavily on healthy data that is readily available to schemes, we need to ensure that a constant program of data cleansing and maintenance is happening on a regular basis, to future proof you against any future regulations.
Last year, Pensions Age and Equiniti conducted a major survey showing the disparities in the emotional levels of confidence around data quality versus the actual level of preparedness. The study showed the level of confidence in data quality was hindered when Trustees and administrators were questioned around plans to do the data quality exercises outside those required by the Regulator. A significant 61% of schemes said they were potentially planning such initiatives, suggesting there are some real concerns around the overall integrity of data. Has this changed since then?
Data quality is a behaviour, not a project and this clearly needs to be well-understood.
With the hype of GMP rec in full swing, now is the ideal time to really start looking at your data. Regardless of whether you have recently completed a data accuracy project, there may well still be discrepancies, miscalculations and omissions due to legacy issues which you need to address. The moment you stop paying attention to your data, it can degrade and this can have a detrimental effect on your members. There really is no better time than the present to get your data in order.
The ability to deliver projects whilst considering data quality
Interestingly, only a quarter of respondents believe that the quality of their data will be a hindrance to their ability to deliver their envisioned projects. With the mind-set that data is a project based task that must be addressed only when vitally needed then there will be the inevitable worry that your data could jeopardise the success of a project or even wider business process.
With the example of GMP rec, if you only choose to look at your data now and come to the stomach twisting truth it is poor, then you could be at risk of having to rectify the problem before even addressing the main issue or even see yourself answering to the Regulator.
46% of respondents said the quality of their schemes data will increase the delivery cost of these projects in comparison to, 44% who said it won’t. A controversial response and one that is certainly up for debate. In hindsight, if the quality of your schemes data is well maintained and good then really this could mitigate future data cleansing projects, allowing you to unlock the power in your data. Thinking about GMP, if everyone had good data then would GMP rec have been an issue in the first place? Now that’s for another day.
Data is at the heart of what we do, it is much more than regulatory compliance, its core is founded by effective pension administration. We believe that you can achieve amazing things with data. If you look at it differently and see what others can’t. You can define insight, spot dangers and make the most of opportunities.
The results of the Professional Pensions Administration survey clearly show that people are in no doubt how important data integrity is for their schemes, but the reality is, little is being done to get schemes in order.
We continue to see fines being levied by the Regulator for poor data even for more recent master trust schemes supporting auto enrolment, this is not something that just impacts legacy schemes.
Let us not forget members will have paid into schemes for many years, the quality of the data we hold might impact the savers retirement outcome and their ability to live the future they envisioned, is it then not reasonable that we should be expected to hold the most accurate data that we can?