Fergus Clarkes suggests that proper administration is crucial and standards need to be raised.
In her speech at the ACA conference in February 2017, Lesley Titcomb, Chief Executive of The Pensions Regulator, among other things, was discussing data quality and data security, and commented;
"In both of these areas, data integrity and security, Trustees should be holding their administrators to account, and if their administrator cannot demonstrate adherence with accepted industry best practice, such as the standards set by PASA, we will expect them to change their administrator.
Leaving members at risk of being paid the wrong benefits, or of having their personal information stolen by cyber criminals is not acceptable."
A few weeks later Andrew Warwick Thompson also commented "Our focus and regulatory remit is on ensuring that trustees engage with their scheme administration as a priority issue.
Industry groups like PASA are hugely helpful to us in driving good practice from within the administration industry itself, complementing our efforts to raise standards."
Administration is a key component to effective plan governance and management. Poor record keeping or poor administration performance continue to have a material effect on member outcomes.
Poor administration has the potential to negate the effort applied to optimising investment and funding activity to mitigate liability.
Despite the regular attention to administration matters by the Regulator, the industry generally continues to show little heed, as evidenced from various surveys undertaken by the Regulator in 2016.
I for one would not be surprised to see the Regulator take a more draconian step and start to mandate on administration issues.
We have already seen public statements by the Regulator about the attention they will be bringing to this area, and it's not just about education - it's about taking stronger steps to ensure compliance.
One of the key areas of focus from the Regulator is the quality and security of member data.
But it's more than just ticking boxes and completing statements in annual returns. Good quality data is essential to ensure that members' entitlements are correctly calculated, that gaps in data do not delay the payment of a members benefits when they are due.
It's about ensuring that the data is current, accurate and capable of being used.
And cyber security is equally important. Security of data in transit, security of data in systems and security of member data on scheme web sites and in the use of modern communication channels, all of which offer potential weak points for those committed to criminal activity.
So the agenda for trustees and administrators has to address these points, progress reported regularly to trustees and that corrective actions are agreed and effected to improve data quality and security.
Good quality data is an enabler; enabling accurate and timely administration of member benefits; enabling accurate actuarial valuations and thus efficient investment strategies based on accurate information.
Good quality data security also minimises the possibility of data loss and the subsequent reputational damage that emerges for the publicity surrounding a data breach.
Good governance is not an option – it is an absolute requirement.
Written by Fergus Clarke, Executive Director of PASA.