GMP equalisation: don’t let data be your downfall
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One of the biggest issues for schemes embarking on guaranteed minimum pension (GMP) equalisation is data.
That was the message from our recent webinar: GMP equalisation: what’s the delay?
Our polls of the 220 attendees showed:
- Almost half of schemes were doing data work and only 30% had got beyond that stage.
- Incomplete data was viewed as one of the biggest obstacle to getting on with the project.
- Data management was a key consideration for schemes doing GMP equalisation.
But GMP equalisation is now a pressing matter and a pragmatic approach is needed to get the job done. As discussed in the webinar, with the right support there is no need to fear the data.
Data challenges and GMP equalisation explained
Mercer’s Sam Marshall and Brendan Doherty, CEO of software group Intellica, talked about the practicalities of working on a project that is so heavily reliant on historic and live data and how Mercer’s GMP data management platform can cut through complexity of pension equalisation to generate good member outcomes.
Based on the need for pragmatism to get the job done, the key points that Sam made are as follows:
- There are lots of elements of GMP equalisation that can be standardised and trustees should be able to rely on their advisers to deal with the areas that are relevant to a scheme.
- For most schemes there will be enough information to complete calculations for the vast majority of members.
- Any discrepancy between assumptions and 100% accuracy is likely to have a very small effect on members’ outcomes. That’s why it’s important to run calculations early on and assess the actual impact on members before making decisions on whether to make assumptions or carry out potentially costly data cleanse exercises.
A platform designed for GMP equalisation
Brendan said GMP equalisation has exposed the limits of historical pension data systems and of Excel as a way to manage a project with many moving parts. That is why Mercer asked Intellica to help design and build a data management platform specifically for GMP projects that:
- Keeps track of member data that is constantly evolving through day-to-day updates, annual events and ad hoc projects carried out separately from GMP equalisation
- Loads and transforms data, carries out automated checks and produces results at a summary and individual member level, so that you can quickly move on to carrying out calculations
- Maintains a complete audit trail of all changes in individual member’s data to give trustees comfort that everyone is being handled properly
- Distinguishes between assumptions and actual data changes so that resolution information is sent back to the pension platform but assumptions are not
- Helps produce the right communications for each individual member, increasing the efficiency of the project and reducing complexity as the time comes to tell members what they will receive
The platform is available to all schemes as part of Mercer’s support on GMP equalisation projects, whether we are the current administrator, the scheme actuary or neither.
Please get in touch if you’d like to talk to us about how we can help with your GMP equalisation project. In the meantime you can watch the webinar.
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