Enabling your pension scheme’s data strategy
Data has become a prominent commercial priority for many schemes in recent years, driven by the upsurge in risk transaction activity and the need to complete exercises that are affecting the whole industry, such as GMP equalisation and getting ‘dashboard ready’. However, given the need for the majority of pension schemes to go through these exercises, many trustees and companies are finding that such exercises are subject to long waiting-lists due to a need to improve the quality of data conflicting with general resource constraints on third party administrators to undertake business as usual activity. This issue has been exacerbated by a reduction in overall administrator resources available across the industry following the Covid-19 pandemic.
PwC does not provide Business As Usual pension administration services, therefore we are not directly impacted by these resource constraints. PwC is a data driven organisation, with data at the heart of what we do - we therefore have a specialist, complementary and independent offering for pension trustees using our scalable data team (called ‘Operate’) based in Belfast.
Our services include:
- Data gap analysis and Pensions Dashboard readiness assessment
- Data improvement via member file reviews and contingent spouse pension calculations
- Implementation calculations for benefit exercises, including GMP reconciliation, rectification and equalisation
- Preparation of insurer data files
- Secure data file transfer and cloud based pension scheme data hosting services
A key benefit of our approach is that we are independent of the trustees’ ongoing administrator and hence we bring a fresh and independent perspective, unbiased by past practices and approaches that have been adopted. This allows us to provide you with clear and confident recommendations and implementation solutions through a dedicated project team.
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Data is at the heart of pensions strategy...
“Working with PwC as our data specialist has shown that some common beliefs about working with specialist third party data providers on exercises such as data cleanse and GMP equalisation are simply not true. Specifically, working with PwC has dispelled the following myths:
- The learning curve for the 3rd party will delay completion of the exercise: This was not true at all. The PwC team quickly understood the data and benefits and were able to complete the project within the agreed timescale and budget.
- Agreeing the project scope and contract will be a lengthy process: Again, not true. We were able to agree the project scope and finalise contracts within two weeks of the initial meeting.
- Total costs will increase as duplication is inevitable when another party is brought in: Not the case for this project. PwC worked collaboratively with the Trustees’ other advisers, ensuring that there was no duplication of work. Also, to the extent that we were able to progress multiple workstreams in parallel, the accelerated pace led to a reduction in overall costs.
In addition to the above, the PwC team was able to provide a fresh, impartial view of the scheme’s overall data quality - which provided additional value to the Trustees.”
Professional Trustee, Dalriada
How do we process your member data securely and give you the strongest audit trails?
At PwC, we have committed to digitally upskilling all of our people on market leading software and technologies. In addition, working with client data in pensions and in the wider financial services sector is a key part of the work that we do. Therefore, we bring this technology to our day to day working to create efficiencies for our clients and to allow a more meaningful discussion on decisions required.
In terms of transferring and storing data, we have a highly secure platform, Sightline, that will be used in sharing data between PwC and other parties and is cleared for use with highly confidential and sensitive datasets.
To process and manipulate all of your data sources in an efficient manner we leverage off a suite of pre-developed workflows developed within specialist data processing software, which allows us to document and provide a robust audit trail of the decisions made in respect of data and reconciliation / rectification and with clear visibility on the the pre/post impact for each individual member record processed.
What is PwC’s Operate team?
PwC’s Operate team was established in 2017 to extend our services beyond advice and implementation into running operations for clients and responding to market demand, particularly in data based projects. Operate is a key strategic priority for our firm and therefore we have made a significant investment into developing our propositions with the purpose of providing cost-effective solutions that can be rapidly deployed.
Our Operate team now comprises 2,000+ operational PwC staff who are predominately based within Belfast and has vast experience in providing support within the financial services sector, running a number of high value, complex operations - including working with FTSE 20 and FTSE 50 companies on a number of data-driven exercises.
Within Operate we have a dedicated pensions data team, who work with our pensions actuarial and consulting team to provide data cleanse and correction services (including GMP equalisation and insurer ‘trade ready’ services) for pension trustees. The Operate team have also directly supported and provided resource to some of the large third party pension scheme administrators so have a broad experience.
Further, the Operate team are trained in data and leading data process tools, which enables them to approach all projects with a technology and data solutions mindset to address clients needs in a cost effective manner whilst providing them with significant capacity and scale to deliver projects. All their processes are ISO-certified for additional confidence.
Overall, the Operate model allows PwC to provide you with a blended, cost-effective approach - combining our technical experts in our pensions consulting team with the delivery capability in the Operate team to achieve an end-to-end efficient and cost effective solution.
Scheme moving to buyout: Supporting on data exercises
We are supporting the Company and Trustees of a c£100m pension scheme which is currently progressing through a buyout transaction. A key part of our role has been analysing the data, benefits and administration practices, resolving insurer queries and combining data from different advisers in respect of GMP rectification and equalisation.
Value added:
- Reviewing and cleaning up the data ahead of sharing with insurers, to provide them with the confidence on the accuracy of the data.
- Playing back the data to the insurer to validate their interpretation of the data and administration practices.
- Independent verification of the GMP reconciliation and rectification approach.
- Combining GMP rectification and equalisation data from different parties and working with the administrator and insurer to complete all outstanding data and benefit exercise as part of the buy-in to buy-out phase.
Third party administrator: GMP reconciliation and rectification
A third party administrator required additional resource to support them with a number of data-driven exercises. We were able to support them by utilising our Operate team and technology.
Value added
- Increased resourcing to complete data exercises, allowing their staff to focus on BAU activity
- Completion of GMP rectification exercises, ensuring that GMP equalisation can proceed in line with agreed timescales
- Rapid deployment of a scalable workforce to call upon in the future as demand for particular projects increases or reduces
- Allowed a number of projects to progress, cutting months off implementation timescales
Large pension fund: Thorough review of data quality
A global oil company wanted a forensic review of the underlying pensions data and in particular to help them prepare for Pensions Dashboards. We deployed and customised Data: PASS.
Value added
- Rapid development of a powerful insight and analytics tool
- Ability to quantify the number of members who will pass / fail the Dashboard Find requirements
- Ability to prioritise resources to the most important data issues / deficiencies and thus ensure the maximum amount of good quality and complete data was available to be exposed on Pension Dashboards
- Supported their drive toward self-service
Scheme with legacy buy-in: Resolving the data gaps
Our client entered into a buy-in contract over 20 years ago, with the day-to-day administration run by the insurer, and were planning on moving to a buy-out as soon as possible. Ahead of this, the trustees needed to address the benefit issues that had emerged in the interim, including GMP equalisation, however as the administration was performed by the insurer for many years, the required data was not readily available to the trustees.
Value added
- Undertook file reviews, tranching and GMP equalisation calculations
- Provision of an insurer and administrator ready cleansed data file
- Unblocked the resource constraints affecting the exercise, allowing the wider benefit work to progress in line with the original plan
- The Operate team’s scalable resource allowed us to increase the data team as the population requiring data rectification grew in size
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