The Dangers of Bad Data on the Journey to Buyout
Why data quality now defines buyout readiness
Pension schemes are entering unfamiliar territory with improved funding levels opening the door to buyout for many trustees, but progress is far from guaranteed.
As insurers become more selective, the focus has shifted away from surplus alone and towards scheme readiness. At the centre of that readiness sits data: how accurate it is, how complete it is, and how recently it has been reviewed.
This research in partnership with Professional Pensions highlights a growing disconnect between trustee confidence and the underlying reality of scheme data and why unresolved issues are increasingly acting as a brake on endgame ambitions.
Why Data Issues Persist
While the report suggests that data is discussed frequently at trustee level, only 35% of respondents have commissioned a formal readiness report, and just 26% of buyout aiming schemes have completed a buyout specific audit.
Common challenges include:
- Uncertainty around the cost and scale of data cleansing
- Limited clarity over regulatory expectations
- Over-reliance on administrators to surface issues proactively
- A focus on data completeness rather than accuracy
As a result, many schemes reach the buyout window with unresolved data risks still embedded in their records.
46%
of respondents viewed their data as being sufficient quality
16%
of respondents said they lacked the internal capability to improve data quality
12%
of respondents said lack of clarity around regulatory expectations was a barrier for improvement work
A surplus doesn’t guarantee success
Despite improved funding, many schemes are discovering that the journey to buyout is longer and more complex than anticipated.
- Nearly half of schemes are targeting buyout, yet the vast majority have not secured an insurer
- Among schemes planning to transact within two years, more than half are still without an insurer
- Insurers are now able to prioritise schemes that present clean, dependable and well-governed data
This imbalance has turned buyout into a buyer’s market, one where data issues can delay negotiations, reduce pricing certainty, or prevent quotes altogether.
Data Confidence vs Data Reality
The research indicates that a gap between perceived and actual data quality may put pension schemes at risk and disrupt endgame strategies.
Trustees consistently rate their scheme data highly, with an average score of 8.3 (out of 10) for completeness and 8.2 for accuracy. However, the research reveals contradictions beneath the surface.
- Many schemes believe their data is “good enough” while admitting they lack the internal capability to improve it
- Data reviews are often reactive, triggered only by major projects rather than ongoing governance
- Low member engagement and high instance of returned post continues to erode data quality over time
This creates a dangerous gap between perceived readiness and actual insurer expectations.
If member records are not properly verified and maintained, operational risks and uncertainty can arise during key decisions, undermining insurer confidence in buyout negotiations.
Data red flags
Insurers consistently flag the same issues during due diligence:
Missing or inconsistent dates of birth
Unverified spouse and dependent records
Outdated address details
Heavy reliance on paper-based files
Placeholder data used to mask gaps
Inconsistent formatting across records
What schemes should focus on now
To strengthen buyout readiness, schemes should:
- Treat data quality as an investment, not a cost
- Undertake regular audits that test accuracy, not just completeness
- Start data remediation well ahead of market engagement
- Maintain ongoing screening to prevent data decay
- Align trustees, administrators and advisers around shared accountability
Schemes that act early are better positioned to secure insurer attention and better outcomes for members.