The Pensions Regulator (TPR) is challenging the pensions industry to improve the way data generated by schemes is used and managed.

Launching a major new data strategy, TPR says it wants to see standards raised to “improve outcomes and benefit the wider market through increased efficiencies, enhanced innovation and reduced regulatory burden”.

Research shows open banking has benefitted the economy by £4 billion, helping businesses and individuals manage their money in new and innovative ways.

TPR wants pension schemes to adopt better data practices and take practical steps towards open finance so that pension savers and schemes could similarly benefit. Director of Data Services Lisa Allen says: “The world is undergoing a data revolution, and we want the pensions industry to capitalise on this.”

“We have set out a blueprint to make this vision a reality and will now be working across the whole industry to drive consistent, coherent and, where possible, open standards for data on metrics that matter.”

TPR says it will create a working group to help the pensions industry improve its use of digital tools, data and technology in savers’ interests.

It says it will also bring together pension and technology experts, along with professionals from other fields to look at designing a framework for “responsible innovation” in pensions.

TPR says savers expect their financial needs to be met, their data to be accessible, and their pension schemes to be transparent and accountable.

Good, modern investment and governance decisions require high-quality, fully digitised data to avoid inconsistencies, increased costs and security risks, it says.

According to TPR, research shows thousands of schemes still hold some data non-digitally and warns poor data quality leads to inconsistencies, increased costs and security risks.

MHM comment

Clearly, holding complete and accurate member data is essential for pension schemes. In defined contribution (DC) schemes, member benefits are derived directly from the contributions paid and correcting past errors can be costly and time consuming.

In defined benefit (DB), the focus for many schemes is now on their journey towards buy-out with an insurance company. The data required by insurance companies is likely to be different to what the scheme administrator requires for day-to-day servicing, so an extra project may be required.

To avoid duplication of costs, it is worth engaging with your administrator at an early stage to ensure that any data cleanse project designed to meet regulatory requirements also addresses the scheme’s longer-term needs, perhaps including GMP equalisation and annuity purchase.

To discuss your scheme’s data requirements, contact Andrew Scopes at andrew.scopes@sandccarsalesharrogate.co.uk or call 07860 400645.

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