Is data on your agenda?

Let me take you back to the days before we had GDPR – back to a time before the May 2018 legislation, before those two major case rulings (Schrems and Weltimmo) to a scary time where your data could have been sent all over the world twice over without you knowing why, by who or for what purpose. A time where new members’ details were written on a form and filed away until retirement. When member data was put on floppy disks and posted out between schemes (yes, people used to do that!)

How times have changed! One job for life is a sentiment from days gone by. There has been a growing focus on data across all industries for quite a while, culminating in some very drastic legislative changes last year that created a (mostly) media driven, public focus. Data is now very much front of mind for consumers and should definitely be prioritised by pension schemes.

Data and good record keeping are vital to running a scheme effectively and The Pensions Regulator requires trustees and scheme managers to review their common and scheme-specific data once a year.

However, ‘review’ doesn’t quite do justice to the expectations, as the requirements from a ‘clearer, quicker, tougher’ regulator go a bit deeper than review. Scheme-specific data checks need to be a fundamental test of whether the data held is fit for the purpose of pensions administration and aligned with the scheme’s benefits and processes. This isn’t a tick box exercise of rolling out generic tests year after year. It is no longer sufficient to just measure the presence and consistency of data. Tests need to measure the accuracy of data. And data scoring needs to expand beyond the main administration system; separate records such as a payroll database or standalone spreadsheets also need to be included.

The thing is, data has, for too long, been seen as a necessary evil, a tick box, an also-ran or an additional cost. But it’s so much more than that. When data work is done well and with long term objectives in mind – it will drive you forward, not hold you back.

The first PASA Data Guidance that launched today – that ITM has co-authored – provides comprehensive guidance for the industry on data management, covering 36 different areas of pension scheme data. Here are some highlights of why these data areas are important, and just what good data can impact:

  • Basic functionality – be it record keeping requirements, producing annual statements or simply paying the right benefit to the right member at the right time – data is key.
  • De-risking – whether it’s knowing if dependant details are accurate or the liabilities calculated on correct date of births; the goal is to maximise the efficiency of any exercise – the enabler is data.
  • Dashboard – it may be attracting transfers in, off-loading small pots, or for many schemes simply complying with the compulsion that is coming. Whatever dashboard services means for your scheme – a vital component to delivering your objective is data.
  • GMP – reconciliation, rectification or equalisation – data is the lynchpin.
  • Master trust authorisation – either gaining authorisation or agreeing a consolidation exercise with a bigger player – good, clean data is essential.
  • Fit for the future – whether it’s understanding your membership, predicting trends for retirement options or migrating to a new platform – data is the foundation for the future.

So, maybe the question to ask isn’t “Is data on your agenda?” It should be: “Can you afford for it not to be?”

 

Author: Maurice Titley