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Executive Summary of Go Pensions Feedback to the Pensions Regulator

Go Pensions fundamentally supports the initiative the Pensions Regulator is taking on data/record keeping.  In our experience poor data is the root cause of a many pensions administration problems.  Calculation queries raised by administrators very often trace back to poor or missing data. We believe the Regulator has correctly highlighted issues and needs.  We feel the regulator could be a little bolder but appreciate the need for a prudent start point.  The Regulator has highlighted events which require good data.  We feel they are relevant and optical.  However, they do not include many events which happen more routinely within the lifecycle of a pension scheme.

We currently feel that the Regulator may need to move to enforce the proposals. The commercial realities of pensions administration may hinder speedy short term progress.  A stalemate may arise between the desire for quality and the cost of achieving it. We do not believe the proposals are self financing although this may be the case for some of the ‘worst’ cases.

A key area we would like to see changed is the division of data between ‘core’ and ‘additional’.  This effectively establishes two classes of data.  It may diminish the importance of additional data.  We advocate one list of data, some good guiding principles, and more overall discretion and reliance of scheme experts, notably the administrators themselves.

Go Pensions would like to see a stronger emphasis on processes.  Being systematic and rule based, they can have a powerful influence on the integrity of data. Good processes may also provide a long term commercial advantage to administrators.  This could help to counteract the cost of the initial bulk cleanse.  Go Pensions would like to see more data being made available via the web.  This would help to drive data cleanse initiatives.

Measuring and auditing the data is an interesting area considered by the regulator. We support the concept but feel that more work is needed to create appropriate benchmarks.  We very much support the idea of placing a data quality statement in the Trustees’ annual report.

The Regulator sought guidance on timescales. We have suggested that a six month window to ‘fix’ data should be sufficient. We also advocate that a hard deadline could be set by which all data nationally is fixed.  Thereafter, the emphasis is placed on the processes to keep the data clean.  Go Pensions suggest the establishment of a national database of deferred records.  This would help clean a lot of deferred pension records.

In a wider context

Some poor record keeping results from poor HR systems and practices.  The Pensions Regulator may wish to consider an alliance with the HR industry to pick up the wider life-cycle of data processing.

We do not believe the proposals will help member understanding.

We would observe that many issues also arise from calculation errors.  Such errors are often systematic and can impact many members.  They are often ‘logic bombs’ which do not materialize for many years.  Their impact can be huge when discovered and it often takes a great deal of time and effort to fix them.  The Regulator makes only a small passing comment about this in the consultation paper.  We would be very supportive of any initiatives the Regulator considers to champion quality calculations as well as good data/record keeping.

If you would like to talk to us about our feedback to the Pensions Regulator or obtain a copy of the full response, please contact Susan Phillips on 07795 036555.