Key focus areas for trustees in 2024: a pensions administration perspective

Key focus areas for trustees in 2024: a pensions administration perspective

As we enter 2024, pension trustees are faced with a unique blend of long-term strategies and immediate priorities for pensions administration. This year, several key areas demand attention, and should shape the focus of trustees’ when they’re engaging with their administrator.  

• Pensions dashboard readiness: For most schemes, the initiative to get dashboard-ready paused during 2023, but 2024 marks a crucial year for reigniting these efforts. Trustees must ensure that their scheme’s data is accurate and meets the required standards. Collaborating closely with administrators is vital to ensure that calculations and systems align with the dashboard’s requirements. This proactive approach will streamline the integration of pension schemes with the dashboard.
   
• Completion of GMP equalisation: Guaranteed Minimum Pension (GMP) equalisation remains a significant focus. Those schemes that have yet to begin this process must prioritise it. GMP equalisation is not just a regulatory requirement; it’s also a matter of ensuring fairness and equity in pension benefits. It’s important to acknowledge the high resource demands still required for GMP equalisation. Trustees should work to secure a commitment from their administrator on the timing and resources needed to undertake this complex task. The significance of this cannot be overstated – delays or problems in meeting the agreed timetable due to resource constraints could result in your scheme’s implementation plan being relegated to the back of the queue and rescheduled. This potential setback underscores the importance of ensuring that the timetable for GMP equalisation is not only achievable but is also committed to well in advance. Proactive engagement with administrators to secure these resources is essential to maintain momentum and ensure that the process is completed efficiently and within the agreed timelines.
   
• Cyber security vigilance: Cyber security continues to be a critical concern. Trustees should review The Pensions Regulator’s cyber security guidance released at the end of 2023. It’s essential to understand the evolving cyber threats and collaborate with administrators to manage these risks effectively. With updates to several cyber security standards and information security frameworks being made, trustees must ensure that their administrators are transitioning to these new standards. Legacy systems and newer platforms are all susceptible to cyber threats, so it’s crucial not to take anything for granted and to seek assurances that your administrators’ technology platforms meet the latest security standards.
   
• Member service focus: At the core of every pensions administration service is the member experience. Trustees should understand how their administrators are evolving their service offering. This includes staying informed about new technologies being introduced to enhance member services and upcoming service changes that could improve the member experience. Continuous service improvement, despite all the other areas of focus, is a hallmark of any administrator’s service strategy. Engaging with administrators to understand these changes and how they benefit members should not be forgotten.
   

As we look towards 2024 and beyond, it’s clear that the demands placed on pensions administration have never been higher. The convergence of immediate and long-term priorities present both challenges and opportunities. Trustees and administrators must navigate these with foresight and diligence. 

Ensuring readiness for the pensions dashboard is not just about compliance, but also about embracing a future where data transparency and accessibility are paramount. For GMP equalisation, trustees must be proactive in resource planning and vigilant in meeting timelines to avoid setbacks. This task, while complex, is critical in upholding the principles of equity and fairness in pension benefits. 

Cyber security remains an ever-evolving threat, requiring continuous attention and adaptation. Trustees must not only stay informed about the latest security standards and regulatory guidelines but also ensure that their administrators are equally committed to these security measures. The safety and integrity of member data and pension assets cannot be overstated. 

Focusing on member service is about placing the needs and experiences of members at the heart of pensions administration. Trustees should actively engage with administrators to explore and implement innovative solutions that enhance member engagement and satisfaction. This commitment to service excellence will be a defining factor in the success of pension schemes. 

In conclusion, the role of pensions administrators in 2024 is more dynamic and multifaceted than ever before. By addressing these key areas with strategic focus and proactive engagement, trustees and administrators can ensure that pension schemes not only meet regulatory demands but also deliver value and security to their members. The journey ahead is complex, but with careful planning, collaboration, and a commitment to continuous improvement, pensions administrators can navigate these challenges successfully, setting a strong foundation for the future of pensions administration.