Scottish & Newcastle switches administrator to finish data job

Schemes are currently being driven to complete these exercises by regulatory deadlines for data records, as reported by PW last week, or the need to correct records ahead of a derisking deal.

But many are finding the task of reviewing and updating their data is more costly and lengthy than expected, prompting some to switch providers, according to consultants and providers.

Carol Young, pension manager at S&N’s parent company Heineken, said the 41,000-member scheme was conscious of the costs, but said the rectification was “vital” to ensure members are being paid the correct level of benefit.

“The trustees believe this approach gives the best solution to move the record-keeping project forward in a risk-controlled manner to a satisfactory conclusion,” added Young.

“The intention is the transition will be seamless as far as members are concerned, and there will be no delay in the pension rectification process.”

S&N had begun a review of its data and administrative processes in 2010, according to a recent trustee newsletter.

But following delays in a pilot exercise in March, the plan switched from current provider Mercer after the process proved “more costly and lengthy” than anticipated, trustee chairman Lynn Riddick told members in a recent report.

The costs of data cleansing

The scheme will now have to transition to new provider Capita over a period that could take between six and nine months. Mercer declined to comment due to client confidentiality.

However, Mercer will continue to provide support to the scheme and its members during the transition, and remains investment and actuarial adviser to the plan.

“It is unusual to swap administrators because there is normally a cost involved,” said Roger Higgins, a partner at consultancy KPMG.

Higgins said that, generally, trustees might say: ‘We have had you to administer the scheme over the past few years; why are we paying you to order the records correctly?’

Some schemes have managed to convince their administrators to build the cost of the changeover into their data review charge, or to agree a fee structure that spreads it over the long term.

Penny Maystone, head of tracing and data solutions at Capita, said: “Everyone is complaining about the costs of correcting data, but unfortunately historically there was not the [same] requirements.”