Automated pension data sees 76% reduction in number of payroll reports
13 January 2017
The Royal County of Berkshire Pension Fund saved an estimated 604.1 hours of administrative work over six months, and ended its struggles with updating member data by introducing an automated data exchange.
In a report by Pensions Expert The administering authority for the fund, also saw a 76 per cent reduction in the number of reports produced by its payroll department after piloting the software with 15 employers. It now spends just half a day a month on payroll data transfers, compared with 12 days previously.
Despite the oft-praised efficiency benefits, experts said take-up of automated data feeds has been relatively slow, in part due to the wide variation of systems and processes among pension schemes.
The £1.66bn Berkshire scheme said its decision to implement Aquila Heywood’s i-Connect software in February 2016 was driven by difficulties obtaining timely and accurate member data from employers.
Steve Lyon, responsible for technical analysis at the scheme said that the Berkshire Pension Fund highlighted that a regular, electronic transfer of pension data would be essential for future efficient pension administration, increasing quality of data held and reducing the number of errors and queries.
System providers Aquila Heywood said that improving efficiency was a particularly pressing need for public sector schemes.
“The introduction of [career average revalued earnings] for public service pensions schemes, aligned with the growth of employer volumes, has significantly increased the pension administration burden on both the pension schemes’ administrating authorities and participating employers”, said Mark Lecompte, director of customer relationships at the company.
“In addition, the requirement for more real-time data exchange, accuracy and reporting has compounded the challenge.”
Industry concerns around data protection in pensions have been growing for some time, with Lesley Titcomb, chief executive of the Pensions Regulator, warning schemes to include cyber security among their key risks in September last year:
“It is trustees who are the data controllers under the data protection act, so it is the trustees who must make sure they have all the proper protocols and policies in place, and that any third parties they use also have the appropriate controls in place.”
Automated data exchanges should boost the overall security of pension schemes against cyber attacks, as Daniel Taylor, director at administration specialist Trafalgar House, explained:
“Many employer administrator data exchanges still rely on passing data back and forth via email, which is an inherently insecure method that can easily be intercepted…
I’ve seen manual data exchange, validation and upload processes take up to two weeks to complete, and the same process that is delivered through an automated employer data exchange take less than an hour – delivering better results and a more secure data flow.”
Read the full report from Pensions Expert.