UK Update: Pensions: It’s all about the data

A continual thread running through the big ticket pensions issues just now such as the Regulator’s General Code, the new defined benefit funding regime, pensions dashboards, auto-enrolment, and of course pensions manifestos in the lead up to the General Election, is the importance of maintaining accurate data.

Inaccurate data means that pension scheme members may not receive the benefits they are entitled to, incorrect payments may be made, and the scheme is opened up to a myriad of legal, administrative, and reputational risks. Pension scheme lawyers are frequently advising on issues which have arisen as a result of inaccurate or incomplete data, and the recent cases on recovery of overpayments show what a minefield this can be.

Pension scheme data keeps popping up on our radar from week to week, and rightly so. The Pensions Administration Standards Association (PASA) has just published new guidance on ‘Data presence v accuracy’. In the guidance, PASA provides insight as to why data shouldn’t only be present but accurate. The guidance covers what accurate data is, what trustees should do to improve their data accuracy, and suggests steps trustees should take to ensure data accuracy is maintained. PASA recommends that trustees should undertake a data quality audit to identify issues in their data and areas of weakness, and review and remediate issues where necessary. PASA notes that data accuracy should be a constant and continual process “in the journey to deliver the benefits and service to scheme members”, and that data should be consistently monitored throughout the life of a scheme and controls reviewed to ensure they remain adequate to prevent “future data degradation”. This is not a new message, but a useful and important reminder.

The Pensions Regulator (TPR) confirmed in a recent speech that schemes must get the basics right on data quality and that ‘the stakes have never been higher’. TPR notes that this is particularly important so that schemes can deliver on key areas such as pensions dashboards and demonstrating value for money. TPR warns that schemes will see a step-change in its enforcement approach, ‘…going out to market, at scale, to ensure schemes have high quality data and deliver value for members’.  Schemes should continue to have data quality at the top of the agenda.

Aside from data accuracy, pension scheme data security is another hot topic just now which has again come into sharp focus following a few high profile data breaches in the pensions industry. Having accurate data is a must, but keeping that data secure is equally important, as is having robust processes in place for responding to a data breach should it arise.

With the recent dissolution of Parliament, there are a number of pensions measures that are on hold and we wait with interest to see whether/how these will be progressed following the General Election in July. It is easy for these big ticket items to take up the attention, but the focus must also be kept on what sits at the heart of these: data accuracy and security. Getting the basics right, as TPR says.

By Burness Paull LLP, Scotland, a Transatlantic Law International Affiliated Firm.  

For further information or for any assistance please contact ukscotland@transatlanticlaw.com

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