By highlighting these critical areas, Brendan offers a roadmap for pension schemes to navigate the evolving landscape and ensure they are well-positioned for success in 2025 and beyond.
Pensions Dashboards: A Game Changer for Data Transparency
With the long-awaited launch approaching, we continue to support the current timeline and, as an industry, we must maintain pressure on ourselves, schemes, and the PDP to adhere to the schedule. This marks a major milestone in data accessibility, offering members a consolidated view of their pensions and retirement savings. For pension schemes, this means the time horizon for ensuring high data quality is almost upon us – particularly the accuracy, completeness, and compliance of member records.
The risk of poor data quality is clear. It can undermine member trust and slow down the integration process. Schemes must be proactive in addressing any inconsistencies and ensuring data is ready for seamless integration into the dashboard ecosystem.
Buy-in and Buyout Transactions Continue to Soar
According to multiple sources, the pension buyout market is set to exceed £50 billion in 2025, with a surge in the number of transactions surpassing any previous year partly due to the rise in gilt yields and pension scheme surpluses. This boom is driven by the ongoing de-risking trend among pension schemes of all sizes looking to transfer liabilities to insurers, not just large pension schemes. For insurers, the challenge will be ensuring data quality to streamline these transactions and maintain competitive pricing.
Effective data preparation will be essential to facilitate swift buy-in and buyout transactions. Addressing missing or inaccurate member records and maintaining data integrity throughout the process will be critical to securing smooth, cost-effective transitions. The more data issues can be resolved before entering negotiations, the quicker and more efficient the deal will be.
The Rise of Pension Superfunds and Consolidators
Pension superfunds and consolidators are becoming an increasingly attractive option, particularly following the success of transactions by Clara over the past few years. With the consultation on minimum size requirements for multi-employer schemes closing on 16 January 2025, we may see significant developments in this space, including a renewed focus on superfund transactions as an alternative to traditional buy-ins and buyouts.
For pension schemes considering consolidation, thorough data due diligence at the gateway test stage will be key to ensuring smooth and compliant transactions. Schemes will need to ensure that their data is both clean and up to date, with robust procedures in place for verifying records before any transfers occur.
Data-Driven Solutions for GMP Projects
With many pension schemes still grappling with the complexities of Guaranteed Minimum Pension (GMP) reconciliation, rectification, and equalisation projects, 2025 will see increased demand for advanced data solutions. Legacy data issues, including historical inaccuracies and discrepancies in member records, continue to pose significant challenges.
To address this, schemes will increasingly turn to advanced tools and methodologies for standardising, auditing, and rectifying data. AI and machine learning-powered solutions will play a growing role in automating these processes, ensuring greater accuracy and efficiency as schemes work through these complex projects.
Cybersecurity and Data Protection: A Growing Priority
As the digital transformation of the pensions industry accelerates, the risk of cyberattacks increases. The launch of pensions dashboards and the expansion of buyout transactions both rely heavily on digital data exchange – highlighting the urgent need for stronger cybersecurity measures.
Trustees and administrators must invest in robust cybersecurity frameworks and secure data management practices to protect sensitive member data from potential threats.
Regulatory Scrutiny on Data Accuracy Intensifies
The Pensions Regulator (TPR) has made it clear that data accuracy will be a top priority in the coming years. With the rollout of Pensions Dashboards and increased activity in risk transfer, there will be greater scrutiny of data quality across the industry.
Schemes will need to demonstrate their readiness for regulatory audits through regular data checks and compliance with emerging data standards. Ensuring data quality will not only be essential for meeting regulatory requirements but will also help schemes maintain trust with members and stakeholders.
Advancements in AI and Data Analytics
AI and data analytics are rapidly transforming the pensions landscape, offering new insights into funding strategies and member behaviour. By harnessing AI, schemes can unlock predictive analytics to optimise their management strategies, improve member engagement, and enhance decision-making.
However, to fully leverage these advanced technologies, pension schemes must have clean, structured data. This will be an ongoing challenge in 2025, but the opportunities are significant for those who can harness the power of data to improve operational efficiency and outcomes for members.
Looking Ahead: A Data-Driven Future for Pensions
As we enter 2025, it’s clear that data will be the key player for many of the industry’s most pressing developments. Whether it’s ensuring the accuracy of Pensions Dashboards, facilitating smooth buyout transactions, or embracing new technologies like AI, the quality, accessibility, and security of data will be paramount. For pension trustees, administrators, and insurers, the year ahead will require a sharp focus on data integrity and management ensuring that systems are ready for the challenges and opportunities that lie ahead.
As always, at Intellica, we’ll continue to monitor these trends closely, providing our clients with the software and solutions needed to stay ahead in a rapidly evolving pensions landscape.
Brendan Doherty
CEO, Intellica
About Intellica
Intellica, established in 2014, is a technology-driven leader in pension data solutions, employing a collaborative partnership model to serve pension schemes across both the public and private sectors. The company has pioneered Constellation, an industry-leading pensions data software suite that seamlessly integrates cutting-edge technology with advanced analytics and powerful insights, delivering unparalleled capabilities for clients.
