Government Actuarys Department
Data - its uses, challenges and benefits, is at the centre of the work we undertake as actuaries. We recently shared our expertise at the joint Police and Fire Data Conference, an event focussed on the importance of data.
The conference was co-hosted by the National Police Chiefs Council and the Local Government Association. 140 were in attendance who represented pension scheme administrators, software providers and authorities from across the country.
GAD Pensions Consultant Taylor Brightwell-Smith was a speaker on the day. Below he reflects on the event and the overarching importance of data.
Taylors reflections
It was fantastic to contribute to an event recognising the importance of data to support long-term ambitions. This event was pensions focussed, but the themes apply across many other domains and government policy areas.
I was a panellist on a session considering data and successful project implementation. I was asked to reflect on how important timely and accurate data is for member experiences.
In my experience, the key to ensuring members engage with their pension scheme is good data. But, bad data is usually the main reason for dissatisfaction.
Before I joined GAD, I was a client manager for a specialist third-party administrator. One of my responsibilities was to onboard new clients (such as those transitioning their pensions administration services). Part of that process was working to understand their strategic priorities.
The pensions space can be perceived as lagging behind others in the financial sector when it comes to user experience and digital innovation. Yet, I found that, every single client I spoke to wanted to do more in this area.
They wanted to prioritise their members experience and provide an exceptional service. The issue was never a lack of ambition, unwillingness to invest, or the absence of viable products. It always boiled down to data problems - uncertainty, inaccuracy, or inadequacy. Thats when project costs skyrocketed, and member experiences suffered.
All projects are data projects
I recently wrote a blog for our website about Pensions Dashboards in which I considered the data challenges schemes may face when matching members for dashboards.
In that piece, I compared the matching process to a game of Guess Who, where the character tiles represented scheme member data. Thinking about pensions administration projects more generally, another board game analogy came to mind.
Im sure weve all experienced those rainy days where youre stuck indoors, bored. So you dig out an old game from the back of the cupboard. As you open it up, you realise that pieces, cards, or even the rules are missing. Despite this, you decide to press on and try to have a fun game anyway!
This is how many pensions administration projects can feel at the outset. The rules are your scheme data, for example the rules for calculating member benefits. The pieces and cards represent your member data, while the banker symbolises your administrator and the players are your members.
When parts of the game are missing, its up to the banker as the person leading the game to work it out and get it right. Yet inevitably, something ends up changed or wrong. The game drags on, frustration sets in among the players, and nobody has a good time. But what if we had invested the time to ensure we had everything we needed from the start? Or, if something was missing, to find and replace it? We would have all had a much better experience.
That for me summarises the importance of maintaining complete and accurate data.
GADs data focus
Supporting clients with their data is a core pillar of GADs work.
Weve previously highlighted our use of data science to help enable our clients to use their data in new ways.
Weve also used data to help clients estimate the cost of fraud and errors and to help ensure transparency of taxpayer costs. GAD used claims data provided by HM Land Registry to model how claim numbers and costs will develop in the future. This was then used to estimate an Indemnity Fund to meet the cost of claims.
Through our work with pension schemes on their actuarial valuations we help to identify areas of data uncertainty. This can then be fed into plans for improvement. We have also been working with academics to use this data to provide insights on scheme populations and trends. Recent data insights projects include:
- gender pension gap analysis for the Local Government Pension Scheme (LGPS) Scheme Advisory Board
- projections of the number of retirements to help inform caseload expectations for administration planning
- insights relating to partial retirement behaviour and differences in experience by geographical region
Pensions administration support
An area we are beginning to support clients more is on pension scheme data strategies. Over a year ago we began building upon our specialism in this area. We did this by recruiting colleagues with pensions administration backgrounds, like myself, with a view to supplement and support our existing skills.
Our goal is to bring together actuarial expertise with hands-on pensions administration experience. By doing so we can offer a more rounded view on clients data strategy plans.
We are now starting to work with clients in this space; feeding into discussions on their implementation and processes to support successful outcomes.
Looking forward
Data is never a short-term concern. It is an ongoing, evolving area of risk and opportunity. We will continue partnering with our clients to help them reduce the risk and r