The Pensions Regulator (TPR) is to establish an artificial intelligence advisory council as part of a wide-ranging overhaul of how it uses data and technology.
In its new data strategy, set out today (3 March), TPR positioned itself as a “key enabler of the pensions data ecosystem”, responsible for setting rules and standards for data collection, handling, sharing and security.
It wants to establish an internal “community” of data experts to improve its use and understanding of data within the pensions system.
The regulator wants to nurture greater collaboration with the pensions industry through initiatives such as an artificial intelligence advisory council and a data working group.
“This will mean higher expectations of the pensions industry, but also more modern data practices which will reduce regulatory burdens and enable more effective market competition.”
Lisa Allen, TPR
It also wants to bring together pensions and technology experts “to design a framework for responsible innovation” in the industry. “This collaboration will help share ideas and speed up impactful innovations,” TPR said.
Data skills were “more important than ever”, it explained, highlighting the importance of accurate information to the pensions dashboards project and successful insurance transactions for defined benefit schemes.
Establishing a “data professionals community” would “underpin our transformation”, TPR said. This would involve “increasing collaboration across different skill bases” and “empowering forward-thinking people”.
Principles and efficiencies
The new data strategy will help reduce the regulatory burden on pension providers, trustee boards and employers, the regulator said, as well as facilitating greater competition to benefit consumers.
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TPR plans to establish a series of “data principles” that will “set high expectations for data management and effective data governance” to be shared across the pensions industry.
It aims to explore a move from an automatic “push-based” system to a “pull-based” system, meaning TPR would request data when it is needed. “This can make retrieving data more efficient and responsive and could lower the burden of reporting for schemes,” the regulator said.
It also wants to create a “data marketplace” within TPR, modernising its existing data management systems and connecting to others. This will make it easier for the regulator’s staff to access information for analysis and regulation purposes.
The regulator is also seeking to embrace artificial intelligence technologies through the use of a “sandbox”, an isolated environment where it can test new technologies in collaboration with industry.
Addressing poor data standards
As well as internal changes, TPR emphasised that the pensions industry need to collaborate on data management best practice, as poor data can be costly.
“Bad data – information that is incorrect, incomplete, outdated or poorly formatted – drives extra costs,” the regulator stated.
“For defined benefit schemes, these costs make them less attractive to buy out. For all schemes, pensions dashboards are raising expectations from savers that need to be met.
“We recognise the different lifecycles of defined contribution and defined benefit schemes and how this impacts your data. But at the heart of this, all schemes require good data to ensure they are effective and efficient.”
, a technology provider, found that almost a fifth of queries through the dashboards ecosystem will likely result in “possible” matches rather than confirmed matches due to “data inaccuracies”.
It also claimed that schemes could be losing thousands of pounds a month due to members having died but their records not being updated. Heywood estimated that this was costing schemes more than £250,000 per 10,000 members every month.
that data was a “fundamental problem” for the dashboards project and indicated that resources available to address the problem had been limited.
‘A data revolution’
Lisa Allen, director of data services at TPR, said: “The world is undergoing a data revolution, and we want the pensions industry to capitalise on this – delivering more effective and efficient services, sparking innovation in service provision, and enabling savers to better manage and engage with their pensions.
“Today we have set out a blueprint to make this vision a reality and will now be working across the whole industry to drive consistent, coherent and, where possible, open standards for data on metrics that matter.
“This will mean higher expectations of the pensions industry, but also more modern data practices which will reduce regulatory burdens and enable more effective market competition.”
TPR emphasised in its strategy that it needed to be ready to “embrace, adapt, innovate and lead in raising standards across all scheme types, ensuring clear, accessible, and reliable pensions data that meets savers’ changing needs”.
