‘Dirty data’ must be addressed for the success of pensions dashbords – ITM

The majority of pension schemes and providers are lacking essential customer data that is necessary for the success of pensions dashboards, ITM has revealed.

In its official research for the pensions dashboard project, ITM found that pensions that were set up before 2000, which account for three fifths of the total number of funds considered in the survey, had the highest average levels of inaccurate or missing data. This tends to be caused by issues with legacy books and systems, ITM said.

Under 30 per cent of workplace personal pensions and over 20 per cent of defined benefit occupational schemes also had this type of ‘dirty data’.

ITM noted that the availability and accuracy of national insurance numbers, date of birth, postcodes and initials/surname are all essential for the live pensions dashboards to function effectively.

While correct data for key information such as these was more readily available, it was less reliable for schemes set up before 2000.

Dates of birth were inaccurate for around 30 per cent of DB occupational schemes during this time, yet there were no inconsistencies in this data for any occupational schemes established after 2000.

In addition, postcode data was highlighted as a particular issue for occupational schemes, with 60 per cent inaccurate or missing in DB schemes from before 2000 with a value of £100,000 to £200,000. Over 30 per cent of postcode data was also incorrect in all other DB schemes and defined contribution occupational schemes surveyed regardless of the pension pot value.

Approximately 50 per cent of workplace and group personal pensions set up before 2000 had inconsistent data when it came to NI numbers. This fell to 20 per cent NI number inaccuracy for DC and auto-enrolment schemes after 2000.

The research acquired data from over 440 pension providers and schemes with more than 20 million members.

ITM chairman Duncan Howorth, said: “It’s no surprise in some ways that pension products before the millennium have the poorest quality data, given that many of these survey respondents will have inherited a portion of their data from previous providers where data was maintained on different systems and even in some cases, hand written documents.

“These high levels of inaccurate data reveal that the industry is a long way from achieving the high data standards needed for fully functioning pensions dashboards. Connecting the sheer volume of data out there is a crucial challenge that has held up the development of the pensions dashboards until now and it will only be of real value to consumers if they can access data that is current, accurate and complete. Data cleansing will therefore be an essential investment that will need to take place on a significant scale over the coming months and years.”

Howorth continued: “Indeed, it’s our belief that pension providers must achieve a minimum data quality standard before they can sign-up to the live dashboards. If the data standard is too low, the quality of the output in a ‘live’ environment will be highly unreliable.”

ITM is one of six technology partners for the Treasury’s pensions dashboard
prototype project.

    Share Story:

Recent Stories

DB risks
Laura Blows discusses DB risks with Aon UK head of retirement policy, Matthew Arends, and Aon UK head of investment, Maria Johannessen, in Pensions Age's latest video interview

Sustainable equity investing in emerging markets
In these highlights of the latest Pensions Age video interview, Laura Blows speaks to Premier Miton Investors fund managers, Fiona Manning and Will Scholes, about sustainable investing in equities within emerging markets

High-yield Investing
Laura Blows discusses short duration global high-yield strategies with Royal London Asset Management head of global credit, Azhar Hussain, in the latest Pensions Age podcast
Sustainable Investing
Laura Blows speaks to Royal London Asset Management sustainable fund manager, George Crowdy, about global sustainable equity investing