The Department for Work and Pensions (DWP) should focus on enabling existing regulated entities, particularly trustees, to enforce minimum standards on administration, governance, and trusteeship, rather than building new authorisation regimes, according to Lumera.

In response to the DWP’s consultation on improving standards for trust-based workplace pension schemes, the insurtech company said that minimum standards could drive a ‘step-change’ in quality across administration platforms and integrated service providers (ISP), as well as data quality and management standards.

Lumera argued this would help the industry to build on the ‘good practice’ standards already in place across the market.

However, the firm said it would be better for the DWP to concentrate on allowing existing regulated entities to enforce minimum standards, as opposed to creating new authorisation regimes.

Looking at ISPs, Lumera felt minimum standards could go further than existing guidance on good practice in areas such as the technology offering for carrying out matching.

As an example, the firm argued that a minimum standard for matching could make sure that specific schemes do not flood the dashboards universe with bad responses and data.

Minimum standards more generally could help mitigate the data risks faced by administration service providers from increased levels of consolidation activity, the consultation response added.

It stated that secure data migration during the transition of administration was critical, especially in the defined contribution (DC) pension market.

Furthermore, minimum standards for consolidation readiness that accounted for administration processes and reconciliation of member holdings with fund managers, alongside data quality, would minimise consolidation risks, Lumera said.

“The DWP’s proposals on mandatory minimum standards for ISPs come at a critical period of evolution for the sector,” commented Lumera commercial director, data & dashboards, Maurice Titley.

“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.”

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