Jessica BirdLumera has urged the Department for Work and Pensions (DWP) to empower trustees to enforce minimum standards for integrated service providers (ISPs), rather than introducing a new authorisation regime.
The insurtech firm set out its position in response to the DWP consultation on trustees and governance, which closes on 6th March.
As part of the consultation, the DWP is seeking views on introducing new minimum standards to raise standards in trusteeship, governance and administration of trust-based workplace pension schemes.
Lumera said minimum standards could deliver a step-change in quality across administration platforms, ISPs, data quality and management standards, building on existing ‘good practice’ guidance already in place across the market.
However, the firm argued that the DWP should focus on enabling existing regulated entities, primarily trustees, to enforce minimum standards rather than creating additional layers of regulation.
In relation to ISPs, Lumera said minimum standards could go further than current guidance issued by bodies such as the Pensions Administration Standards Association (PASA), particularly in areas including the technology used for data ‘matching’.
It suggested that clearer minimum standards could reduce the risk of poor-quality data entering the pensions dashboards ecosystem and affecting user experience.
The firm also pointed to data risks linked to consolidation in the Defined Contribution (DC) market.
It said minimum standards for consolidation readiness, covering data quality, administration processes and reconciliation of member holdings with fund managers, could help mitigate risks during data migration and transitions between administration providers.
Maurice Titley, commercial director, data and dashboards at Lumera, said: “The DWP’s proposals on mandatory minimum standards for integrated service providers (ISPs) come at a critical period of evolution for the sector.
“By focusing on minimum standards, rather than adding layers of regulation that could inadvertently slow down progress, we can ensure a more effective and streamlined approach to this new but critical area of pensions administration.
“This is all part of a direction of travel that requires an acceleration in investment in technology-driven solutions and secure data management processes to put trustees and administrators in a strong position to meet all the upcoming regulatory requirements.”
