Duncan Watson, Managing Director Products and Services, EQ Paymaster, discusses.
Trustees are accountable for the quality of their member data. The game changer though comes from the increased profile the quality of that data is attracting. 2017 looks to be a pivotal year for data quality: the perfect data storm.
The regulator is disappointed, legislation is looming and, without good data, membership of the Pension Dashboard is out and member self-service will be poor. So what are the initial priorities for Trustees?
The regulator’s view
At the end of last year The Pensions Regulator put its stake in the ground. It had previously set out its record keeping expectations and had stepped away to concentrate on more pressing, and public, matters. The results of their survey of 530 trust-based organisations, however, firmly put paid to this more laissez-faire attitude to data.
Andrew Warwick-Thompson, Executive Director at tPR, said:
Good record-keeping is essential to the good running of a scheme. The time to engage is now – if you don’t, you run the risk of increased costs, not managing funding or risks properly, and you could even put members’ benefits at risk.
He continues: "We know schemes are looking to improve members’ experience and engagement through enhanced use of technology such as offering self-service access or participating in industry-wide initiatives like the Pensions Dashboard. But all this relies on good data, and good data security.”
The data cleanse
If you outsource, typically there is a free data cleanse during transitions.
If you administer in-house, when was the last data cleanse planned? Did this happen and what were the results? Were these shared with you?
Sometimes legacy data issues can be deprioritised while the more operational aspects of the transition are dealt with. Do you know what the data issues were and, if so, how they are currently impacting your scheme? If you administer in-house, when was the last data cleanse and is there a risk-based rectification plan in play?
Quarterly meetings with your administrators are another opportunity to challenge administrators and delve into data quality. After all, trustees are the data controllers, not the third party administrators. What are your data audits revealing?
Recognise there is a problem
The industry inertia to more broadly fixing data quality has been down to a number of factors. Reactive data fixing has been the norm as issues are fixed on a member by member basis when there is a significant life event such as retirement or death. When valuing liabilities, assumptions can be made to satisfy actuarial needs without delving into data issues.
But data quality is a thorny and complicated subject. Data fixing in the pensions industry can be a highly manual process and can be costly.
The important thing though for trustees is to recognise that there is a problem.
Admittance is the first step
Once the problem of data quality is admitted, the next step is to conduct an assessment of the completeness of the scheme data. Are there any particular issues with the conditional or calculated data on top of any common data gaps?
After a proper assessment has been made, Trustees should be fully aware of what their data issues are, how they are likely to impact the running of their scheme and to determine how they should be prioritised. So now is the time look into the eye of the data storm.
For further information on this subject, please speak with your Equiniti relationship manager.