Pensions management is the major backbone of pensions investment, administration and law. Management of contributors’ data is mainly about how data is constructed, structured, managed and monitored.
It is ultimately the responsibility of the trustees to ensure that data for their schemes are correct and accurate. Considering the fact that a contributor could have say 25 – 30 years of contributions, the systems should be formidable enough to hold the data.
If someone starts contributing
Two main types of contributors’ data have been identified in pensions scheme management.
Common data: which is mostly data that rarely changes; namely names, date of birth, social security number, pensionable age and gender.
Conditional data: refers to data that are subject to changes with time and change of situations, namely; salary levels, contribution levels, benefit nominations, address among others.
Both have a crucial role they play in serving the contributors. Ability for trustees to pay the correct benefits to the right persons at the right time depends on quality of data. Quality of the contributor’s data refers to the accuracy of all required data which is the responsibility of the trustee. Though trustees by their powers may delegate this function to their scheme administrators, they are ultimately responsible for the data integrity of their scheme.
Achieving Data Integrity
Achieving quality of data depends on a number of factors;
1. The efficiency, effectiveness and robustness of the administration system deployed in the holding of member and scheme data.
2. The capacity of the staff of the administrator
3. The presence of data validation procedures anytime data is transferred or shared. Monthly data validation is necessary due to the changes in both common and conditional data that may apply to a scheme. Changes refer to data in respect of joiners, leavers, contribution rate changes, This a data monitoring activity.
4. Trustees may demand from administrators an annual data status report.
5. The presence of a working and a tested Disaster Recovery and Business Continuity systems
Data Quality Tests
Trustees should demand this from Administrators at least once a year.
In the data integrity exercise, common data should achieve 100% as there is no room for errors in data items like date of birth, names, social security number and benefit nominations. The lapses revealed in the data of a scheme should be immediately resolved.
Trustees may also demand a proof of an active Disaster Recovery system (DRS) from all their service providers.
Benefits of Quality Data
1. Make prompt and accurate benefit payments
2. Provide a strong framework to minimise conflicts
3. It reduces cost and time for operations, reconciliations and resolution of conflicts
4. It earns credibility for the scheme and the trustees
M-DoZ Consulting is a pensions consulting firm that provides scheme advisory services for employer sponsored schemes, and training of trustees and staff of service providers