Why administration needs a prime spot on your next trustee board agenda

When there’s a packed agenda and the conversation is flowing, Trustee meetings easily overrun. Everyone has a train to catch (or, these days, another virtual meeting to jump on straight afterwards) so something has to give.

What tends to happen? The topic of Administration gets moved to the next meeting. There is little noise, service levels are as expected, and the papers are standard – so we can skip administration and get to the important stuff. Right?

The backbone of a good pension scheme

Administration brings the members’ perspective to life in a meeting that’s focused on funding, investment strategies and covenant assessments. At the end of the day, it’s about the members, and who do the members communicate with? The administrator.

While it is important – and in the members’ interests – to ensure the scheme is properly funded and assets are invested correctly, the administration service ensures members have a great experience and the trustees are working with the most accurate data member benefits.

Ultimately, it is the administrators who ensure members, and the trustee have the right information to make informed decisions and that benefits get paid on time.

The truth about administration

There’s a common misconception that administration work is simple and easy to deliver. The truth is very different. For those who go back 20 years and remember pensions ‘simplification’, you’ll likely know that it was anything but! And it’s been getting more complex ever since.

Good pension administration is essential for ensuring that employees are paid the right benefits and delivering a successful member journey. It involves managing the scheme effectively, keeping accurate records, and communicating with members in a timely and transparent manner.  

Behind that, there’s the ever-changing legislation, the threat of pension scams, and all the hoops to jump through for transfers. Mix in some GMP rectification, equalisation and, for the cherry on top, Dashboards; no sooner have you completed one change, the next is looming.  

The risks of getting it wrong

Effective administration helps to build trust and confidence, attract and retain employees, and support their long-term financial wellbeing. It also helps to reduce the risk of errors and disputes, while ensuring regulatory compliance. This protects the interests of the employer and the employees and supports the long-term sustainability of the scheme.

For those schemes that don’t get it right with no focus on the members and administration, it inevitably will create issues for the scheme, be the focus of lots of trustee meetings and cost you more later. Whether it's poor data that will hike up your buyout costs or a lack of engagement with your members, so that they don’t understand their options and make uninformed choices – everyone pays eventually.

How you can get it right

Alongside changing legislation that often doesn’t come with a good lead in or guidance on interpreting the changes, administration must constantly evolve in other ways. For example, communicating effectively with members means understanding their needs – and most members now expect access to modern and easy to use technology.

When you hear ‘pensioner’, you probably don’t think about them reviewing their benefits online, but an Age UK briefing published in June 2024 suggests that 52% of over 75s use the internet at least once a month for online banking. If they are banking online, they would likely prefer to review their pension information online too.

To achieve this, administration providers need to invest in technology and constantly review their members’ journeys to ensure their ever-changing needs are met. It is critical to producing good outcomes that trustees understand how to reach members and how to keep them engaged to ensure their journeys are smooth and expectations are met.

The latest technology and an ethos of continuous improvement will reap the benefits in multiple ways, improving member engagement and making the work of trustees easier and more able to react to the constant changes to legislation and regulations.

Call to action

Your administrator is the proverbial swan, making things look calm and simple on the surface, whereas they are busy paddling away under the water to keep on top of everything.

Next time you have a trustee meeting, don’t postpone administration to the next meeting – move it up the agenda!