By Melanie Durrant, Partner and Public Sector Consulting Actuary at Barnett Waddingham
Here are some important factors we want to draw attention to.
Update on the pensions dashboard
In March 2023, the Department for Work and Pensions (DWP) announced that there would need to be additional delays to the rollout of the pensions dashboard programme.
The idea of the pensions dashboard has been around since the Budget in 2016, but as it is a hugely complex project, it is perhaps unsurprising that further delays have come, despite the significant amount of work that has happened already. The LGPS supposedly still has a staging deadline of 30 September 2024, which is when LGPS funds need to have “connected” to a dashboard, but there continues to be pressure on the Government to push this back.
From the ministerial statement, it looks like this may happen, but we await further news hopefully before the summer parliamentary recess which begins on 20 July 2023. Members won’t actually have access until the “Dashboard Available Point” and this date is still to be confirmed by the Secretary of State. Either way, Funds still await LGPS specific guidance, with a separate framework for providers set to be launched in 2024.
PASA (Pensions Administration Standards Association) released two new pieces of dashboard guidance on 29 March 2023, and we advise all administrators to familiarise themselves with it. It includes guidance on data matching (i.e. what to do when a National Insurance Number is unavailable), and where there are possible data matches (i.e. where the matching criteria is only partially met) - two issues that are going to be the most complex areas of them all.
Systems providers are working hard to get their systems ready for the dashboard but the additional pressure of McCloud implementation is making this difficult with ongoing concerns over resources. The recent change of the revaluation date from 1 to 6 April has also meant that resources have needed to be directed elsewhere.
Data quality monitoring
With the ever-increasing number of employers and members, it is vital to keep working on data quality during the inter-valuation period. In addition, with pensions dashboards, McCloud remedy implementation, the General code and the Good Governance project looming on the horizon, there are many other non-actuarial valuation reasons to monitor data quality. So, with the 2022 valuations signed off, this is a good opportunity to put a plan in place for regular data cleansing exercises to ensure an ongoing high level of valuation data quality and good governance.
One BW product that funds have found useful recently is our Data Quality Report feature. This new feature helps our funds to monitor the quality of their valuation data and can provide reports to compare employers’ data quality with other fund employers and to measure changes in quality over time. With data being such an important element of upcoming project work, these reports will be a useful tool in monitoring data quality alongside our Online Data Checker.
Data work flowing from the valuation
There are other useful outputs that can be taken from the valuation data too. Data can be used to either better understand your membership profile or to demonstrate good governance.
If you would like to better understand your membership profile, a few next steps to consider include:
Analysing gender pay gaps
Looking into the financial impact of McCloud
Analysing changes in your membership profile
Exploring the impact of pay awards
Similarly, if you would like to demonstrate good governance, you could look to:
Carry out bulk bond reviews
Carry out cashflow modelling
Start an employer covenant review
Calculate bulk cessation estimates
Cashflow data
Cashflow data quality is equally important to accurately track the funding positions of individual employers. With most funds now having moved to monthly submissions, we would also recommend providing provision of cashflow data to the actuary on a more regular basis. More regular provision would result in more accurate funding updates - for those employers that use our online funding monitoring system LGPS Monitor - as well as reduced workloads at valuation time and quicker turnaround times for employers requiring accounting disclosures.
Coming soon – LGPS Manage
Our experience of the 2022 valuations revealed new employers and ceased employers that funds were not previously aware of, many employer name changes and member transfers between employers. LGPS Manage is our upcoming innovative new data store, where employer data and actuarial data will all be held on a secure website. This tool will directly link to our other actuarial tools to ensure that we use the most up-to-date information available in our work.
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