As a pension trustee or someone who runs a public service scheme you should ensure that your administrator has effective processes for maintaining data. You should also continually improve the data your scheme holds.
This involves reviewing data, deciding how you’re going to improve it and agreeing improvement plans.
Work with the scheme administrator and the employer to improve your processes, using them to fix any errors that you find.
Data improvement plans
All pension schemes collect and hold large amounts of data which changes on a regular basis. It is therefore likely that there will be issues with missing or inaccurate data from time to time.
You should review scheme data at least once a year.
If you find any issues you should put an improvement plan in place to address them. Your administrator should be able to help you design an improvement plan, or assess the one you currently have in place.
The improvement plan should clearly set out the steps you’re taking to improve your scheme data.
Your plan should be unique to your scheme’s circumstances. It doesn’t need to be complicated. The amount of detail should depend on the complexity of the issues you’re trying to address.
Set objectives
The data improvement plan should clearly set out the objectives you’re trying to achieve by having better data. If you have more than one objective, you should list them in order of priority.
Objectives can include:
- addressing data issues which impair your ability to run your scheme effectively: paying benefits correctly, processing core transactions, ensuring a high standard of service for members, keeping costs manageable or meeting legal obligations (may be identified using your annual data review, an audit or the valuation process)
- improving members’ experiences, such as providing them with online access to their records
- increasing automation or administrator efficiency, for example by reducing service times as information is more readily at hand
- preparing to move to a new administration system or a new administrator
- improving employer confidence in the assessment of liabilities and the appropriateness of their contributions and recovery plans
- improving data ahead of a risk-reduction or a liability-management exercise
The administrator’s role
You should break down the activities your administrator will perform for you as part of the improvement plan.
For each activity, you should set out:
- the issue to be addressed
- the method to be used, for example member address tracing or researching company employment records
- who is doing the work and how long it will take
- any assumptions made, for example the number of records likely to need work, which members are covered and how errors will be fixed
how you will know the task has been achieved
Dependencies with other work
You should identify any other work which might influence your improvement work, especially where data is changed or the same resources need to be used.
This will help you identify potential sources of conflict or opportunities to minimise burden. This includes reducing the number of times you ask employers for data or only writing to members once.
Other work you may need to consider includes:
- valuations
- member communication exercises
- guaranteed minimum pension reconciliation and equalisation
- year-end reconciliation
- negotiating an administration contract
- risk-reduction exercises
- proposed scheme structure changes
Set a timeline for the plan
You should talk to your administrator and agree a timeline for the data improvement plan.
The plan must have a defined end date within a reasonable period. More complex work can take several months, so you should consider breaking it down into phases.
Your timeline should clearly set out key milestones, reporting and decision points. It should also reflect the dependencies you’ve identified.
Secure resources
Plans should take account of available staff and financial resources. The administrator and employer will need to help you, so you should agree resources with them.
You should agree at the start whether the work will be delivered as part of ongoing business as usual administration or as a separately managed project with additional budget and resource.
If you’re diverting resources from other work, you should set out how this will affect the scheme.
As well as the administrator’s resource, you should consider which other parties you may need to source data from.
Likely sources and examples of data they can supply include:
- employers - providing member information, employment and contribution history
- HMRC - National Insurance numbers
- members - dates of birth, email addresses
- tracing companies - address checks, existence checks
- advisers, such as actuaries or lawyers
Set outcomes
You should set out the outcomes you are aiming to achieve, based on your objectives. Include how you will measure them and how long they will take to achieve.
Outcomes can include:
- improved member service, for example fewer member complaints and reduced processing times for events such as transfers
- more member communications issued accurately and on time
- fewer assumptions in valuation data
- better administrator performance, for example less time to complete certain tasks
- reduced administration costs
- completed tasks, for example clearing any backlogs
- updated and documented procedures which reduce the risks of errors recurring
- improved data scores, which you should retest once you’ve cleaned the data to show progress
Roles and responsibilities
You need to have appropriate oversight of progress and the quality of the work delivered.
You also need to be available to answer any queries the administrator has as the work progresses.
You should agree roles and responsibilities at the outset. Your plan should set out who will make decisions, such as sign-off for success criteria, or changes to work on the improvement plan.
Document any leeway the administrator has available to them.
You should set out how the administrator will report on progress, when and who to. This should include reporting to you and other relevant parties, such as pension boards, employers or members.
You may need a range of other formal controls in place depending on the complexity of the work. These can include a decisions/action log or a change control log.
Deliver a data improvement plan
You should work with the administrator to put the data improvement plan into action.
Clearly set out the scope of your improvement work, particularly:
- which data is included
- membership types included
- how far back your improvement work will go
You may need to take a phased approach if:
- there’s a lot of work required
- it’s particularly complex
- your budget requires it
- your objectives need prioritising
- the risks you want to mitigate need prioritising
You should prioritise data which will have the greatest effect on member benefits. Other factors you should consider include:
Data type
Personal information, which will improve your ability to communicate with members.
Specific data item which is a frequent cause of complaints.
Member type or profile
Pensions in payment first.
How close members are to retirement.
Data source
Largest employer first (in a multi-employer scheme).
Scheme event
The data you need for certain scheme events such as issuing benefit statements or valuations.
Return on investment
Issues which have the greatest impact on running costs.
Technical solution
Bulk automated resolution.
Quick wins
Known data issues which are relatively easy to fix.
Improvement work doesn’t end when the data is clean. Make sure the data is fed back into systems. Work with the administrator and employer on follow-up activity such as:
- updating payroll systems and member records
- communicating with members
- correction work, such as sorting out payment errors
- capturing and documenting changes to data and processes so future administration teams know what’s been done
- embedding new processes and working methods to make sure improvements are maintained
Ongoing data improvement
Improving data should be a continuous process, not a one-off exercise.
Your monitoring of data shouldn’t end once you have delivered the improvement plan. You should regularly check the data you need to run an efficient and effective scheme, and make sure data is managed well on a day to day basis.
Improve data quality
There are lots of ways you can improve data quality. This includes:
- reviewing your administrator’s performance
- making sure the administrator validates data effectively
- making sure the employer provides timely and accurate data
Review administrator performance
You should have a robust contract with the administrator. You should review your administrator’s performance against the contract on a regular basis.
You should also have service level agreements (SLAs) with the administrator. These should include metrics relating to the time, quality and accuracy of key record-keeping tasks.
Your administrator should report how they are performing against the SLAs. If the administrator does not meet the SLAs you should ask them to explain why and what they are doing to fix the problems.
The contract may set out what happens if SLAs are not met. This may include financial penalties.
If the contract or SLAs don’t seem adequate you may need to renegotiate them.
It can also be useful for both you and your administrator to put measures in place to receive feedback from members about the administration service. Member experience is a useful measure of quality.
For more information on reviewing administrator performance, see our administration guide.
Validating data accuracy
It’s important that data is accurate. You should know how the administrator makes sure of this.
The administrator should have procedures in place that cover quality assurance. They should be well documented and clear, so any changes in personnel don’t affect the service.
You should make sure your administrator keeps procedure manuals up to date and relevant to the needs of the scheme.
Well-documented procedures will aid a smooth transition if you change administrator. You may wish to check if your administrator follows the PASA Code of Conduct on Administration Provider Transfers.
The administrator should carry out suitable checks and peer reviews as part of the scheme’s administration procedures. You should be happy that these are enough to minimise the risk of errors.
Work with the employer
The employer needs to provide accurate and timely data, so the administrator needs to work well with the employer’s payroll function. Effectively maintaining and transferring data can save money.
You can support the administrator by working with them to set up and maintain processes with the employer, and by helping the employer to understand their role. This could include inviting someone from payroll to board meetings that the administrator attends.
What the employer needs to provide
The employer should provide the following data as and when changes are registered:
- contribution details
- joiners and leavers
- changes to members details, including addresses
Data should be transferred between the employer and administrator electronically wherever possible.
Validation should be built into the process to minimise the risk of human error, and so that data errors are quickly identified. This applies to all data supplied by the employer.