Roberts Pension Digest - Edition 4

Mortality and Residency Screening: 

When to Act and How to Use the Results

A question for trustees and pensions administrators: 

When should pension scheme membership be screened for mortality and residency, and what should be done with the findings? If this question were put to The Pensions Regulator, the answer would likely be clear: schemes should already be undertaking mortality and residency screening as part of their ongoing governance and data‐management activities. However, in reality, not all schemes have conducted this work consistently or comprehensively. 

So, what should trustees and administrators do if screening or tracing activity has historically been limited? 

1.Start as Soon as Practicable 
The most pragmatic approach is to begin mortality and residency screening as soon as is practicable. Early screening provides immediate insight into two critical issues: 
the potential number of unreported deaths within the membership, and 
the scale of “goneaway” members whose whereabouts are unknown. 
With this information, schemes gain a clearer and more accurate understanding of their membership numbers and locations, improving the quality of data used for governance, valuation and communication purposes.

2. Addressing Potential Deaths Efficiently 
Mortality screening typically categorises potential deaths into high, medium and low probability indicators. A structured approach to verifying these cases allows schemes to prioritise effort where it is most likely to be needed. 
Rather than administrators spending considerable time and cost contacting individuals directly, specialist providers, like The Tracing Group, can verify deaths quickly and cost‐effectively. This reduces administrative burden, shortens resolution times and ensures scheme records are updated accurately.

3.The Case for Tracing Members of All Ages 
Some schemes question the value of tracing younger members who are many years from retirement, noting that individuals may move several times before they reach retirement age. It is true that population mobility is high, with a significant proportion of people changing address each year, sometimes as high as 10%.
However, trustees’ governance responsibilities extend beyond retirement events. Schemes must be able to contact members to provide key communications, including summary funding statements, notifications of scheme changes and annual benefit statements. Maintaining up‐to‐date contact details is therefore fundamental to meeting statutory duties and delivering good member outcomes.

In addition, for schemes preparing to connect to Pensions Dashboards, having accurate address data is essential. Failure to trace members ahead of the Dashboards Available Point may lead to increased member queries, complaints and operational strain. 

4. Screening in the Context of Buy‐In and Buy‐Out 
For schemes transitioning towards buy‐in or buy‐out, mortality and tracing activity becomes even more critical. Where schemes have not fully traced their membership, this process should begin at the outset of buy‐in and continue throughout the entire journey to buy‐out. 
Insurers typically price buy‐outs using postcode‐level data, reflecting differences in longevity assumptions and administrative costs. Where address data is missing or incomplete, pricing is often calculated on a conservative basis, increasing cost to the scheme. In parallel, schemes are required to issue regular and timely communications to members throughout the process—something that is not possible without accurate contact details. 

5. Managing Overseas Members 
An additional challenge for many schemes is identifying and verifying members who now reside overseas. This area has seen significant improvement in recent years. Advances in overseas validation, tracing and verification techniques have increased success rates and reduced complexity. 
At The Tracing Group, forensic and genealogical methodologies are used to locate overseas members, while pensioner verification is supported through biometric and liveness technology. These solutions are designed to be secure, intuitive and accessible, including for older pensioners who may be less familiar with digital processes. 

6. Act Early to Strengthen Governance 
Engaging with mortality and residency screening at the earliest opportunity supports effective governance, cost control and member engagement. Whether a scheme is fulfilling its ongoing regulatory responsibilities, preparing for Pensions Dashboards, or moving towards buy‐in or buy‐out, accurate member data underpins every stage of the journey

For further information, please contact: 

Robert Wakefield: robert.wakefield@thetracinggroup.co.uk 

Justin McGuirk: justin.mcguirk@thetracinggroup.co.uk

 
Robert A Wakefield FPMI 
Chief Operations Officer