Pensions insight
But the management of the data needed to record what was due was often woefully inadequate. Many pension schemes have had to go through what nerds call ‘GMP reconciliation’ before they can make sure that they comply with the rules for GMP equalisation. Actuaries will tell you that by the time these processes are completed, any commercial or personal advantage of contracting out will long since have disappeared. This has led to some pension experts questioning whether compliance with this arcane area of pension benefits might not be consigned to the unknown-unknowns bin. That in search of data integrity we may be searching for a holy grail that is a phantom of spurious accuracy. And skulking in the deep recesses of data management is another of pension’s dirty beasts: the money purchase
contracting out regime where companies and individuals elected to contract out, not to guarantee a pension but to float their pension rights on the investment markets as ‘protected rights’. Whether the amounts paid as NICs rebates by the Newcastle offices of the then Department for Social Security are surely unknown unknowns. The only certainty we have is that we have no resource to reconcile these payments with people’s entitlements as identified by historic payroll records. Ros Altmann was right to point out that we are taking much for granted with automatic enrolment (AE). She had commercial reason to do so, she was chair of a company that managed the compliance of contribution and data management for small employers participating in AE. The hope is that with most payrolls and providers moving to
straight-through processing using APIs (application programming interfaces) rather than spreadsheets, with HMRC working with TPR, supplying real time information, and with open banking standards improving the timing of contributions, the scope for errors is reducing. But there remain ‘unknown unknowns’: areas where payroll, providers and regulators trust rather than know. I suspect that – as with protected rights – the pragmatic approach will prevail and we will not seek to upturn every stone in the pursuit of 100% data integrity. But equally, I hope that there will be more like Ros Altmann reminding regulators and employers that the money we are discussing belongs to people who will rely on its investable value in later life. It is their data and it needs to be treated with respect. These may be ‘nuts and bolts’ issues, but they secure the chassis of the car. If those nuts and bolts come loose, the journey could be most unpleasant. We need to know the scope of our unknowns and seek to eliminate uncertainty rather than wallow in data complacency. n
...the money we are discussing belongs to people who will rely on its investable value in later life
Hear from the experts at our national forums Exclusive to CIPP members * , the national forums are a perfect opportunity to hear from the policy team, as well as other key speakers, on developments in payroll, pension and reward legislation. This event will also provide an excellent chance for you to network with other CIPP members.
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| Professional in Payroll, Pensions and Reward |
Issue 55 | November 2019
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