Trustees urged to prepare data ahead of potential DB consolidation framework

Defined benefit (DB) pension trustees could face limited options when it comes to evaluating their alternative end-game options without good quality data, ITM has said.

The firm warned that whilst The Pensions Regulator is expected to release an interim regulation framework for commercial consolidators shortly, trustees may not be able to take full advantage of the new offering if they fail to prepare now.

It stressed that in order for trustees to be able to access the increased opportunities likely to be available following the introduction of such a framework, good quality data “must be available”.

ITM emphasised that understanding the member-by-member value of liabilities is “a crucial step” in the process for any strategic de-risking initiative.

As such, if data is not accurate, then an objective to match assets to liabilities will likely be aiming for the wrong target, limiting the options available to trustees.

ITM director, Maurice Titley, added: “It’s fantastic to see the regulator accelerating the progress in delivering a long-awaited steer on DB consolidation.

“Giving trustees options to ensure they are able to deliver best outcomes for members as we see the challenges for scheme sponsors likely to rise in the coming months and years.

“However, for trustees to be able to access the full range of options they must have good quality data.

“For many schemes good quality data will be the enabler, but as with the challenges for buyout, GMP conversion and the pensions dashboard – poor data will be a barrier to access.”

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