As laid out in our previous blog relating to data accuracy, the pensions sector traditionally takes a reactive or retrospective approach to member engagement.
We could learn a lot from the founding principles of Privacy by Design – be proactive not reactive, preventative not remedial. Throughout our years of working with some of the UK’s top pension schemes, we have identified how the sector can get on the front foot and become proactive with its member engagement.
Moving house is one of the biggest causes of gone-away’s and/or dormancy. It is estimated that 10% of the UK’s population move each year, that’s around 2 million property moves.
Along with Royal Mail’s redirecting services, Credit Reference Agency (CRA) data has long been seen as best in class in maintaining new address data.
Typically, a CRA links a member to a new address, the address is appended to the record (with a level of confidence that is derived from the underlying CRA data) and then a letter is sent to confirm the member has moved to the new address (typically by the fund or maybe a tracing company).
Two challenges arise with the process:
Sending out letters can get very expensive very quickly. What if a pension fund was able to identify a member who was planning to move? They could engage with members at a time when they are in the process of updating their address with multiple organisations, which is on average 22 different organisations – but rarely a pension fund.
Furthermore, this can be used as a data appending exercise as well as it provides the perfect channel to capture digital contact details from the member and can solve the member inertia.
The pension sector is the biggest user of mortality screening data, for obvious reasons.
The defacto standard in the UK is GRO/DDRi data, with some funds opting for additional mortality data like HALO or NDR that can sometimes pick up additional deaths.
A fundamental issue with the long-established mortality screening process in the UK is the frequency that data is processed. Almost without exception, it is monthly. You might wonder why and typically the answer you would receive would be “That’s the way we have always done it”.
This is where understanding the data and its application is key. Most organisations are not aware that it takes 5 to 10 working days from the date of death for the deceased record to be added to the DDRi data.
The DDRi data is updated weekly. If data is being updated weekly and is always 5 to 10 working days out of date surely the logical approach would be to screen against that data weekly, not monthly?
What is the benefit of screening weekly? Considering around 650,000 people pass away each year, funds need to assess the volume of members that pass away every year and calculate the number of payments associated to those deceased members. Screening weekly could halve the amount in overpayments.
How does GBG fit into this?
It was challenges such as these that brought about the creation of Connexus Alerts. Our data underpins most of the UK pension market, we provide tracing and mortality screening services to nearly all the tracing companies in this space.
We know our data works, as we have been involved in this sector for several years. We dig deeper into the breadth of data available to challenge what many consider to be the normal BAU processes.
We can notify you before a member moves house to stimulate engagement and at the earliest possible point we can inform of a death. Our innovative solution has caused a seed change for forward thinking administrators and pension funds, having successfully piloted and implemented the service as a pro-active way to engage with members.