DB Consolidators

Jun 11, 2020

Data quality is key to DB consolidation access

The UK’s top independent pensions data consultancy, ITM, has warned that trustees will have limited options when it comes to evaluating alternative end-game options without good quality data.

The Pensions Regulator is expected to release an interim regulation framework shortly for commercial consolidators. A welcome step forward that increases the options available to trustees looking to protect members’ benefits in the wake of the fall out of Covid-19 and many impacted employer sponsors.

But in order for trustees to be able to access the increased opportunities available to relieve sponsors of their DB pension burden – good quality scheme data must be available.  As with all strategic de-risking initiatives understanding the member-by-member value of liabilities is a crucial step in the process.

At the heart of every transaction is data – individual member data, along with scheme documentation determines the scheme’s liabilities. If the data is not accurate then an objective to match assets to liabilities will be aiming for the wrong target. And ultimately limit the options available to trustees.

Commenting, Maurice Titley, Director at ITM said:

“It’s fantastic to see the regulator accelerating the progress in delivering a long awaited steer on DB consolidation. Giving trustees options to ensure they are able to deliver best outcomes for members as we see the challenges for scheme sponsors likely to rise in the coming months and years. However, for trustees to be able to access the full range of options they must have good quality data.

“For many schemes good quality data will be the enabler, but as with the challenges for buy-out, GMP conversion and the pensions dashboard – poor data will be a barrier to access.”

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