As the landscape of UK pension schemes evolves, there is a rising emphasis on endgame planning, where the ultimate destinations of self-sufficiency, consolidation, or buyout hold significant importance.

The PASA Data Working Group have recently released their ‘Data Readiness for Buy-In and Buy and Buyout Guidance’ which details the objective of ‘data-readiness’ being to ‘ensure data is complete, accurate and held in a consistent electronic format ready for proceeding with an insurer transaction.

They go on to detail the consequences of holding incomplete and poor-quality data. This is ‘viewed unfavourably’ within pension scheme management and ‘no different for insurers. Inadequate data equals higher transaction costs, delay and uncertainty’.

PASA go on to describe 4 ‘Quick Wins’ exercises trustees and pension managers can undertake to ensure the scheme is data-ready.

In this article we will explore one of those 4 ‘Quick Wins’ – Marital Screening.

Insurers will need to be fully aware of any future pension payments to be able to fully cost the scheme’s liabilities.
Payments payable to a spouse, civil partner or eligible cohabiting partner after a member’s death ‘is highly valuable information.’

MM. Spouse is our Marital Predictor tool and can empower funds in a number of ways preparing for endgame:

Survivor Benefits:
If the de-risking strategy involves transferring pension obligations to an insurer or another party, it is crucial to accurately determine the marital status of members to ensure the appropriate treatment of survivor benefits. This is particularly relevant if the de-risking involves the purchase of annuities or other forms of insurance contracts that provide ongoing payments to beneficiaries upon the death of the participant. Knowing the marital status helps ensure that the insurer can properly administer survivor benefits and make appropriate payments to the spouse or other designated beneficiaries. 

Pricing and Liability Assessment:
The marital status of members can have implications for the pricing and liability assessment during the de-risking process. Insurers or counterparties offering buyout solutions may consider factors such as the age and marital status of members when determining pricing and estimating the future obligations associated with the pension fund. Accurate information on marital status enables a more precise assessment of the liabilities being transferred and helps ensure the pricing reflects the actual risk profile of the fund. 

Data Accuracy and Compliance:
Maintaining accurate member data, including marital status, is crucial for regulatory compliance and data accuracy purposes. Pension funds are typically required to maintain up-to-date records and comply with legal and regulatory requirements. Accurate member data, including marital status, ensures compliance with these obligations and facilitates efficient and accurate reporting. 

MM. Spouse can assist schemes to discover undeclared spouses within their membership, one of the key considerations when planning the end game strategy.

Contact our experts today to see how MM. can assist.