Engagement vital to improve member data, schemes say

Schemes need to get members engaged in updating their own information in order to improve their administrative performance, according to others who have recently undergone these exercises.

The scheme representatives were speaking as part of a debate for a ClearPath Analysis paper on data and technology management.

Procuring accurate data is becoming more of an issue for schemes due to regulatory pressure and the savings correct information can secure in derisking exercises such as buyout.

Scottish Television (STV) recently cut £5m from the liabilities of its Caledonian Publishing Pension Scheme after a drive to ensure correct member data led to more accurate mortality assumptions being used.

Schemes should first establish what information is most important to obtain from members, such as their address, marital status, expression of their wishes and health status.

Scheme managers should try and unify these communications into as few exercises as possible, to limit the impact of member apathy. They are also urged to use different approaches for active and deferred members.

Scheme perspective

Simon Kirk, system projects manager at the Kingfisher Pension Scheme, expected auto-enrolment to lift data management up the order of priority for schemes as their membership jumps.

He said: “We expect active members to have their data updated through data feeds between payroll and pensions, so the onus is more on payroll or HR to engage with their employees.”

The level of engagement will often be determined by the type of member being contacted. Deferred members are especially disengaged, he added.

He added: “We have been focusing on these members and encourage them to keep us up-to-date by making the update process as easy as possible for them.”

The scheme uses different levels of approach for active and deferred members. The latter are only contacted on an annual basis to confirm addresses and emphasise the importance of keeping records updated.

It is important for the scheme to assess first of all what data needs updating, which for Kingfisher tended to be the address, marital status and expression of wish forms.

“Once you understand the data you need members to take responsibility for, then you can develop and promote your tools to allow them to do this,” Kirk said.

“There are websites now such as iammoving.com where you update your address change once and the site will then distribute it among selected partnered organisations.”

Paul Goodwin, Aviva’s director of workplace savings, said in the ClearPath Analysis debate the insurer had recently moved 11,000 members into a new defined contribution (DC) scheme, using open sessions and face-to-face communication.

One outcome of this communication drive was to improve the information available to the scheme, and to improve engagement with some of its more innovative features.

“A number of people have now updated their data purely because we have spoken to them,” he said. “Also, for new employees, we have found that those who have always been in the DC scheme have started to take more active investment decisions.”

The DC members now have access to fund values, “what if” and life plan calculations, which the scheme has had “really good uptake on”, he added.

Member incentives

STV recently used longevity specialists LEBC Group to review its member data to get a more accurate picture of its mortality assumptions.

Nick Flynn, longevity director at LEBC, said his firm had picked up a number of techniques for encouraging members to supply accurate information, having worked on similar projects for six other schemes.

“The way we word our letters and when they are sent out makes a big difference," he said. "You learn these things the more you do them.

"You’re more likely to get a response if you offer an incentive. Typically we offer a £50 retail voucher, though our best response came when we offered a £30 voucher.”

But neither Kingfisher nor Aviva saw a need for incentivising members to update their details. They agreed using communication around retirement outcomes would drive members to update their information more regularly.

"If you can get them engaged in that then we will go along way in capturing the data we need," Goodwin added. "We prefer to get this one in the round rather than incentivise them to update data."

Grant Denholm, strategic client director at Experian, said the data technology provider uses a two-pronged approach to improve member data – first a self-service exercise, where members are invited to update their own records, followed by a "sweep up" for those who did not do so.

He said: "We would recommend a regular audit and cleanse of the database to sweep up those customers that are not self-serving, which is always likely to be the larger proportion of the customer base."