Editorial: Bringing pensions into the information age

Even though a lifetime was much shorter in the 15th century (which would have been good news for pension trustees in the Middle Ages – perhaps there’s a volume of Horrible Histories there), this is a staggering fact.

Children starting school this week were born into a world in which social networking and the sharing of personal information online is the norm.

But it is such personal records that seem to be a stumbling block for some schemes, with many struggling to bring legacy data into the 21st century.

A recent survey by EDM Group found a large proportion of information held by defined benefit schemes was either paper-based or on microfilm. This is acting as a drag on schemes, with 32 per cent of pension professionals saying it makes it more difficult and costly to retrieve data.

And it makes it harder to integrate the data with business applications.

Meanwhile, only 5 per cent of pension professionals believe the quality of data collection is excellent and only 3.7 per cent say that data is managed excellently.

It seems some pension schemes are being hit financially by their poor data management practices. Lack of adequate data could impede schemes looking to derisk (see page 5) as providers demand accurate, complete and up-to-date information. Insufficient data could result in insurers raising prices.

Data protection is another minefield for schemes. Spence & Partners last week warned schemes they could face data protection fines if a strict data policy was not implemented and maintained.

Spence recommends staff be trained to make sure they understand how important data security is and what procedures need to be followed. To ensure compliance, schemes should carry out spot checks on staff and consider independent audits.

As the use of data increases, it seems now is the time for schemes to get on top of their data management or it may end up being a financial burden they cannot shake.

Lisa Botter is deputy editor of Pensions Week. You can follow her on Twitter @l_botter and the team @pensionsweek.