As the landscape of Defined Benefit pension schemes continues to evolve, trustees and administrators are facing new challenges and opportunities. The rise of pension buy-ins and buyouts has reshaped the way schemes manage their risks and explore potential transactions. In this changing environment, accurate data has emerged as a critical factor for success.

Data cleansing can often be overlooked by schemes, as trustee’s focus on funding and investment strategies. However, insurers, when securing benefits for their scheme, have stringent requirements for data quality.
In a recent article featured on Pension Funds Online, it was found that ‘schemes with comprehensive audited data can potentially save up to 5% on their insurance premiums’—a substantial difference that can determine the success or failure of a transaction.

Going to market with incomplete and uncleansed data will most likely result in insurers not providing a quote. Similarly, as per the warnings from Axa Investment Managers in an article from Pensions Expert entitled ‘The buyout backlog may leave many pension schemes needing a plan B’ not having complete and cleansed data could see you pushed to the back of an ever-increasing queue as more schemes seek buy-out.

Given these circumstances, Trustees should not underestimate the importance of managing and improving scheme data, immediately prioritising the cleansing of data that can directly impact the cost of insurer premiums. For example, verified marital status is critical and relevant information that must be accurate and complete. Trustees need to develop a plan for a comprehensive data audit and gap analysis to identify the data that needs to be prioritized, cleansed, and even digitized. All schemes should be ready and prepared on a continuous basis so that they are ready to enjoy any opportunity to go to market immediately in search of a quote.

To be “transaction ready,” trustees must conduct a thorough review of the scheme data. This is not simply a matter of basic standardisation but includes tracing members to current addresses, appending spouse information, tracing beneficiaries, and mortality screening. It is essential for Trustees and Administrators to ensure accuracy and complete a signed-off data cleanse to record the necessary scheme data electronically.

In conclusion, when planning for pension buy-ins and buyouts, trustees must place equal importance on both scheme data and being “transaction ready.” Delaying action until staging dates or neglecting the significance of data quality may lead to missed opportunities and a lengthy wait for that opportunity to return potentially setting back your scheme’s end-game goal years.

At MM., we understand the unique challenges faced by pension schemes, and our specialist data cleansing service, MM. Spouse, is designed to help schemes discover undeclared spouses.
Along with other product offerings MM. can aid your scheme to ensure data readiness for a successful transaction.

Contact us today to see how we are assisting schemes like yours become Transaction Ready.