This is a timely update, and one which demonstrates a clear shift in both responsibility and expectations. Reporting scores to the Regulator annually means Scheme’s will have to carry out a regular data assessment, and it is great that this now includes the critical scheme-specific data sets that have, on occasion, been conveniently glossed over by some. The fixed frequency of reporting should encourage Schemes to consider data quality as a long-term objective, aligning any reporting to future objectives and certainly not just a more-frequent box ticking exercise.
Assessing accuracy is another welcome tightening of the regulations – and the quick guide to measuring your data should leave Schemes in no doubt as to what is expected of them. Measuring accuracy will present problems for many, who until now have merely reported on the presence of data without assessing the quality or validity of what is recorded. The days of hundreds of intricate tests, reviewing the same items of data from several different angles, with no firm recommendations or practical next steps are firmly behind us – the Regulator is making it clear that data accuracy needs focus, specificity and consistency. Without question, some administrators will struggle to facilitate this without seeking assistance from specialists, and Schemes will need to consider the value of independent assurance in this area. This will prove significant when reporting scores to the Regulator, as confidence in the accuracy (and that there will not be a large unexplained jump from one year to the next) are crucial.
Finally, one of the most welcome and impactful statements from the Regulator is that relying on data reporting that administrators produce “as standard” is just not good enough. Scheme’s need to take ownership and review whether the standards are appropriate – if they aren’t, then the Scheme needs to take action to ensure they aren’t falling below expectations. Considering whether to continue to use administrators for this increasingly important and specialist function, or whether to seek help from independent specialists, will be a decision high on many to-do lists in 2018.
Author: Matt Dodds
Full details of the Pensions Regulator’s data guide can be found here http://www.thepensionsregulator.gov.uk/data-guide