UK - Defined benefit sponsors continue to under value the risks associated with poor member data, Aon Consulting warns.
The consultant said results from its latest Employer Survey showed 76% of sponsors thought the quality of membership data was either a low or very low risk to the future of their schemes and businesses.
The survey also found that 35% of respondents thought future unknown liabilities were a high or very high risk to their business.
Aon said uncertain scheme liabilities were a major consequence of poor quality membership data, so these results suggest employers are "failing to understand the dangers of not keeping their data in order".
Client relationships and development director Ian Bloxham said: "Despite recognising unknown future liabilities and uncertain liability valuations as high risk, employers are failing to recognise the level of risk associated with the quality of their membership data.
"This is in spite of the firm stance which The Pensions Regulator is now taking in relation to pension scheme record keeping."
He explained: "Poor membership data carries a risk of unidentified liabilities emerging in the future bringing uncertainty into scheme funding decisions. Insurers require reliable, accurate data when pricing risk reduction programmes.
"Data quality can have a significant effect on price. Indeed effective management of your scheme data can potentially save many millions of pounds when sourcing a buy-in or buyout policy."
Lloyds 'not entitled' to give notice
Professional Pensions is looking to update its list of pensions master trusts in the UK ahead of authorisation. Can you help?
RPMI Railpen is in the next step in the journey towards achieving cost disclosure. Victoria Bell tells Stephanie Baxter about taking part in the Cost Transparency Initiative's pilot phase
Interserve's numerous defined benefit (DB) schemes have retained a sponsor link after the company entered into administration and was sold.