Fixing Pension Data Errors in a Defined Benefit Plan

A Fortune 500 food and beverage company administered its defined benefit pension plans in house utilizing a system purchased from a third party. The plan sponsor’s administration was plagued by incorrect calculations that were ultimately traced back to inconsistent and missing data.

This issue caused significant research and subsequent manual system overrides to produce a correct calculation. The plan sponsor was concerned about the potential for human error combined with the liability associated with incorrect pension calculations.

SBA delivered the following scope of services:

• Gathered all available documentation including plan documents, SPDs, system requirements, and system output
• Created a detailed summary of defined benefit plan formulas including all grandfathered rules, exceptions, and other calculation nuances that were handled outside the system
• Identified and cataloged all sources of electronic and hard-copy data as well as the data elements within each source
• Created a comprehensive plan to assess data quality as well as the level of severity
• Worked with the client and outside ERISA counsel to develop methods for correcting data quality issues, including assumptions when actual data could not be located
• Systematically corrected all identified data issues and created an outbound file back to the client’s pension administration system
• Documented the project for future reference and provided the client a copy of our database